On Wednesday, the pound fluctuated near seven-week high versus the greenback amid hopes and worries in markets that European leaders will be able to introduce a comprehensive and decisive plan in their meeting later in the day in Brussels, which damped demand on the dollar as a favorite safe haven.
Still, the pair is getting its direction from the market’s main focus which is the vital European meeting which may continue to determine the main direction in the market in the coming period.
German Chancellor won the Bundestag lower house of parliament approval for expanding the EFSF on Wednesday, giving Merkel the power to negotiate the expansion process during the summit.
Some analysts said today’s meeting may not come out with details which may be announced on November 7-8 when European finance ministers meet. Nonetheless, further delay in the plan will probably cause disappointment in the market, thereby giving more downside pushes to the pair.
Moreover, the upbeat earnings by many European companies, better-than-estimated U.S. data also gave more bullishness to the sentiment.
U.S.durable goods excluding transportation equipment roared 1.7%, higher than both revised and forecasted readings of -0.4% and 0.4%.
On Thursday, The main highlight of the week which is GDP annualized for the third quarter, which is predicted to record 2.3% from 1.3% growth in the second quarter, will be available at 12:30 GMT. At the same time, initial jobless claims for the week ended Oct. 22 and continuing claims for the week ending Oct. 15. Thereafter, specifically at 14:00 GMT, pending home sales will show 0.1% rise in Sep. from the previous 1.2% fall.
The data is predicted to have a remarkable impact in the pair’s movements yet the effect may be temporarily as the main attention will be on the results of the European summit.
On the other hand, as of 23:01 GMT, U.K. GfK consumer confidence survey will remain unchanged at minus 30.
This week, BoE policymaker Martin Weale said there is a possibility that the economy could witness contraction in the fourth quarter, while King said the bank was very close to restarting APF program in September yet they preferred to delay the decision to October to see if the volatility in financial markets would calm down.
Read more about the Forex Market here
