The GBP/USD gained for the second week in the week ended Dec. 9 after European leaders agreed to toughen budget rules, lend the IMF bilateral loans up to 200 billion euros to help debt-trapped nations and increase the capacity of the ESM to 500 billion euros.
Eyes were on the EU summit as investors waited to see decisive measures to tackle the debt crisis. The measures were considered acceptable despite the fact that EU leaders did not succeed to get approval of all 27-EU members to change treaty.
The decisions made by European leaders in addition to the ECB cut to interest rate by another 25 basis points to 1.00% and adopt of non-standard measures to give access to liquidity to banks improved the sentiment and enhanced risk appetite.
This week, the main focus will be on inflation data from both economies in addition to other important data, where attention will be toward the FOMC rate decision.
The release of the data this week will be as follows:
Monday Dec. 12:
While theU.K.lacks fundamentals, theU.S.will announce monthly budget statement at 19:00 GMT, where expectations refer to a narrow in deficit to $140.0 billion in Nov. from $150.0 billion a month earlier.
Tuesday Dec. 13:
CPI and RPI data will grab attention at 09:30 GMT where expectations refer to decline in CPI annual reading for Nov. to 4.8% from the prior 5.0%. The data is predicted to have an impact on the pair if it came much higher or lower than forecasts.
For the US, at 13:30 GMT, the market’s attention will be on retail sales for Nov. where both readings, less auto and excluding auto & gas, are expected to record 0.5% rise compared with the prior 0.6% and 0.7% respectively. At 19:15 GMT, the FOMC will announce its rate decision for Dec. 13 with expectations showing that there will be no change in interest rate that will remain at 0.25%.
Wednesday Dec. 14:
Unemployment data from the British economy will be out at 09:30 GMT, where ILO unemployment for the three months ended Oct. will linger at 8.3% while jobless claims will incline to 13.6 thousands in Nov. from 5.3 thousands a month earlier.
Thereafter, U.S. MBA mortgage applications for Dec. 9 will be available at 12:00 GMT; one hour and a half later, with lower relevance, import price index is due.
Thursday Dec. 15:
At 08:30 GMT, theUKwill release retail sales for Nov.; analysts are predicting 0.4% drop in the reading with auto fuel from 0.6% advance in Oct. As of 13:00 GMT, CBI trends for the month of Dec. will be available.
For theUS, eyes will be on a batch of US data including the release of PPI for Nov. at 13:30 GMT, where the annual reading excluding food and energy will be steady at 2.8%, according to median forecasts. At the same time, both empire manufacturing for Dec. and jobless claims report will be out. At 14:15 GMT, industrial production and capacity utilization for July will be out. Thereafter, particularly at 15:00 GMT, Philadelphia Fed will be available.
Friday Dec. 16:
The week ends with the release of no fundamentals from theU.K., while theU.S., at 13:30 GMT, will release CPI which is expected to linger at 3.5% in the year ending Nov., where the reading excluding food & energy is predicted to steady at 2.1%.
Originally posted here
