By ForexMansion.com

 

The GBP/USD advanced last week after the improvement in retail sales and public finance data, where the split among MPC members that appeared in BoE minutes had slight negative impact on the pound, whereas, on the other hand, the dollar’s vulnerability helped the pair to rise.  

Investors are to focus mainly on GDP for the first quarter as expectations of expansion after the contraction witnessed in the fourth quarter which raised concerns along with the high inflation that the British economy is in the throes of a period of stagflation.

In the UK’s inflation report released in February, BoE expected economic activities to be boosted in the first quarter amid the rebound in global demand, especially from emerging economies, and the past depreciation of the pound.  Also, in last week’s minutes, with MPC members holding interest rat unchanged they revealed that the bank’s first priority is boosting growth.

With few important data due from the UK, the main highlight will be on US data:

Monday April 25:

The US will release new home sales for March, as of 14:00 GMT, with expectations to increase to 280,000 from 250,000 in February, while the UK lacks fundamentals. 

Tuesday April 26:

UKwill release CBI trends total orders at 10:00 GMT, yet it is expected to have slight impact on the pair’s movement. At 13:00 GMT, the U.S. economy will release S&P/CS home price for February while consumer confidence due at 14:00 is predicted to rise to 64.7 in April from 63.4.

Wednesday April 27:

Investors will await GDP data at 08:30 GMT where the release is expected to have an impact on the pair’s movement, especially if it came much higher or lower than market expectations. First quarter GDP is estimated to expand 0.5% compared with the fourth quarter contraction of 0.5%. BBA loans for house purchase will be due at the same time, while GfK consumer confidence survey will be due at 23:01 GMT. 

As of 11:00 GMT then 12:00 GMT, the U.S economy is to release MBA mortgage applications for March and durable goods which are expected to come at 1.5% advance from the prior 0.9% drop. Yet, the main effect may take place after the FOMC rate decision at 16:30 which is expected to witness no change in interest rate, keeping the dollar facing more downside pressure. 

Thursday April 28:

At 12:30 GMT, the US will release annualized GDP for the first quarter (advanced reading), where the world’s largest economy is predicted to expand 1.8% from 3.1% growth in the fourth quarter. At the same time, weekly initial claims numbers are due. U.S. pending home sales for March will be issued at 14:00 GMT, where it is expected to record 1.5% from the previous 2.1%.

Friday April 29:

The week ends with the release of some data from the United States including personal spending and income for March at 12:30 GMT, Chicago purchasing manager for March at 13:45 GMT and University of Michigan confidence for April at 13:55 GMT. 

Originally posted here

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