In the week ended Nov 25, the GBP/USDshowed a sharp decline as the tensions stemming from the euro area enhanced demand on the dollar as a refuge.
The rise in Italian and Spanish short-term bond yields to record high as well as German bund yields triggered concerns the debt contagion is spreading among the euro region’s largest economies amid indecision between European leaders and rejection of German Angel Merkel to issuing euro-area joint debt and the idea that the ECB should play a key role in solving debt crisis.
On the other hand, the latest forecasts by officials refer to a slowdown in growth and inflation which increases speculations policy makers will continue their expansion in the stimulus to boost recovery, thereby putting downside pressure on the sterling which fell to seven-week versus the greenback.
Amid the high demand on the dollar as a favorite safe haven due to the turbulences in European markets, forecasts are in favor of seeing further decline in the pair.
This week the main focus will be the infamous jobs report in the United States as well as housing, manufacturing and confidence data. On the flip side, the British economy will release less important data yet focus will be on PMI manufacturing and construction.
The release of the data this week will be as follows:
Monday Nov. 28:
While the British economy lacks fundamentals, the U.S. will release new home sales for Oct. at 15:00 GMT with expectations referring to a drop to 310,000 from 313,000 a month earlier.
Tuesday Nov. 29:
At 09:30 GMT, mortgage approvals, M4 money supply and net lending for Oct. will be due. At 23:01 GMT, the UK will release Gfk consumer confidence for Nov. with expectations of seeing a drop to -34 from -32.
In the U.S., the main focus will be housing data starting with S&P/caseShiller, due at 14:00 GMT, followed by new home sales due at 14:00 GMT. At 15:00 GMT, consumer confidence is expected to soar to 44.4 in Nov. from 39.8.
Wednesday Nov. 30:
Amid the absence of data from the U.K., eyes will be on MBA mortgage applications for Nov. 25 at 12:00 GMT, followed by ADP employment change at 13:15 GMT, where it is expected to increase to 130,000 in Nov. from the previous 110,000, then at 15:00 GMT pending homes sales for Oct. will be available. Finally, at 19:00 GMT, Fed’s Beige book will be out.
Thursday Dec. 1:
As of 09:30 GMT, U.K. PMI manufacturing will show a widening contraction to 47.0 in Nov. from the prior 47.4.
The U.S. economy will release initial jobless claims for the week ending Nov. 26 and continuing claims for the week ending Nov. 18 will be available at 13:30 GMT. At 15:00 GMT, ISM manufacturing for Nov. is expected to show a widening expansion to 51.5 compared with Oct. reading of 50.8, noting that a reading above 50 means expansion and vice versa.
Friday Dec. 2:
The week ends with the release of the awaited non-farm payrolls report from the United States, due at 13:30 GMT. Expectations refer that change in non farm payrolls will reach 120,000 in Nov. from the previous 80,000 while unemployment will linger at 9.0%.
However, before the release of the NFP report, at 09:30 GMT, U.K. construction is set to show a drop to 52.5 in Nov. from 53.9 in Oct., according to PMI gauge.
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Originally posted here
