The GBP/USD continued its drop for the second week in the week ended Jan. 6 as the dollar took advantage of the safety demand amid the undergoing concerns in the euro area.
Last week, concerns aggravated in the euro area, overshadowing the improvement in theU.S.andU.K.data. Fundamentals from the euro area showed contraction in manufacturing and services for the fourth month and drop in confidence to two-year low while the main cue was the decline in demand on German bonds and rise in French bills yield at auctions.
This week, the main focus will be on the BoE rate decision, trade, manufacturing and inflation data from theU.K.while theU.S.will release retail, trade and confidence, as well as other data.
However, the pair is expected to be more impacted by the general sentiment in the market which is tracking the latest updates from the euro area asItalyandSpainprepares to sell debt.
For this week, the release of the data will be as follows:
Monday Jan. 9:
Both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data.
Tuesday Jan. 10:
TheU.S.economy will release less important data, including wholesales inventories as of 15:00 GMT, while theU.K.lacks fundamentals.
Wednesday Jan. 11:
U.K.visible trade balance report for the month of Nov. will be due at 09:30 GMT, where expectations refer to a widening in the deficit to 8350 million pounds from 7557 million pounds a month before.
TheU.S., on the other hand, will release MBA mortgage applications for Jan. 6 at 12:00 GMT followed by Fed’s Beige Book at 19:00 GMT.
Thursday Jan. 12:
As of 09:30 GMT, theU.K.will release important data; both manufacturing and industrial production for Nov. are predicted to record 0.0% from -0.7% in Oct. At 12:00 GMT, the BoE will keep both interest rate and APF unchanged at 0.50% and 275 billion pounds, according to median estimates, probably the bank will wait till the end of October’s stimulus program next month which will coincide with the release of the quarterly inflation report.
As of 13:30 GMT, the U.S economy will release a lot of fundamentals; retail sales, due at 13:30 GMT, are expected advance 0.2% in Dec. from the prior 0.2% rise. At the same time, initial jobless claims for the week ended Jan. 7 and continuing claims for the week ended Dec. 31 will be available. At 19:00 GMT, the monthly budget statement for Oct. is predicted to show a deficit of $79.0 billions.
Friday Jan. 13:
The week ends with the release of U.K. PPI for the month Dec; the annual output gauge will advance 5.1% from the previous 5.4%, while the input gauge is predicted to advance 9.2% from the preceding 13.4%.
In the U.S., trade balance due at 13:30 GMT will show a widened deficit to $44.9 billion in Nov. from $43.5 billion deficit a month earlier. U.S. University of Michigan confidence, at 14:55 GMT, is estimated to increase to 70.4 in Jan. compared with the prior reading of 69.9.
Originally posted here
