By FX Empire.com
On Monday, while the U.K. economy lacks fundamentals, as of 15:00 GMT, the U.S. will release existing home sales which are estimated to record 2.2% drop in Oct. compared with a prior of -3.0%.
The U.S. data will be carefully watched to follow the development in the U.S. economy especially as the latest data is showing the world’s no.1 economy is showing progress and may lead global economies to recovery in the fourth quarter.
The better-than-forecasted U.S. data released last week managed to ease the tensions spreading in markets on the back of the rise in Spanish and French bond yields which renewed concerns the debt contagion is spreading among the euro region’s largest economies.
However, the pair will probably be affected by the general sentiment which is focusing on the latest development from the euro zone.
In fact, the outlook for the British economy is clouded with uncertainty. Last week, the Bank of England (BoE) said in its quarterly inflation report raised concerns as it mentioned that growth outlook is now weaker and inflation will fall sharply over 2012, referring that the outlook for both growth and inflation is likely to depend on the latest developments in the euro zone.
The dollar benefited last week from the turmoil in markets as it advanced as a favorite safe haven and may continue its advance if the tensions continued to haunt investor’s behavior.
Originally posted here
