In the week ended October 14, the GBP/USD showed an incline on hopes European officials will announce decisive and comprehensive plan to battle the debt crisis, which enhanced demand on the sterling as a high-yielding currency.
EU Commission President Jose Manuel Barroso outlined a roadmap to combat the crisis. Inspectors from the European Union, International Monetary Fund and European Central Bank, know as the troika, said Greece will probably get the next tranche of last year’s 110-aid package in early November. Slovakia ratified the expansion of the EFSF to make all euro-area economies able to use this strong tool, where the aforesaid provided hopes and confidence in markets.
This week, the main highlight will be on U.K. inflation, retail sales and BoE minutes while inflation and housing as well as other important news from the United States.
Monday October 17:
While the British economy lacks fundamentals, the U.S. will release empire manufacturing for October at 12:30 GMT, followed by industrial production and capacity utilization for September at 13:15 GMT.
Tuesday October 18:
CPI and RPI data will grab attention at 08:30 GMT where expectations refer to a rise in CPI annual reading for Sep. to 4.9% from the prior 4.5%. The data is predicted to have an impact on the pair if it came much higher or lower than forecasts. The latest expectations for the BoE referred to a possible rise in inflation to around 5%, noting that the latest expansion in the APF will probably lead to further rise in inflation.
The main focus in the U.S.will also be on inflation data with the release of PPI at 12:30 GMT, where the annual reading excluding food and energy will inch down to 2.4% in Sep. from 2.5% in Aug., according to median forecasts. On the other hand, Switzerland has no releases.
Wednesday October 19:
At 08:30 GMT, attention will be toward BoE minutes release which may show a split among policy makers as some may have supported Adam Posen in adding 75 billion pounds to the APF in October while others opposed it.
In a day full of fundamentals from the U.S., the start will be with MBA mortgage applications for October 14 which will be available at 11:00 GMT, followed by housing starts and building permits and CPI at 12:30 GMT. Housing starts, which will provide evidence about the status of the housing market that triggered the 2008 crisis, are expected to increase to 594,000 in September from 571,000 in August, while building permits will probably show a fall to 610,000 from the prior 620,000. On the other hand, CPI for the year ended September is predicted to rise to 2.1% from the preceding 2.0%. Thereafter, eyes will be on the Fed Beige book at 18:00 GMT.
Thursday October 20:
At 08:30 GMT, the UK will release retail sales for September; analysts are predicting a 0.1% decline in the reading with auto fuel compared with the 0.2% drop in August.
For the U.S., initial jobless claims for the week ended Oct. 14 and continuing claims for the week ended Oct. 8 will be available at 12:30 GMT. Leading indicators and Philadelphia Fed will be out at 14:00 GMT. At the same time, existing home sales report is predicted to show 2.5% drop in Sep. from the prior 7.7% surge.
Friday October 21:
The week ends with the release of public finance excluding interventions at 08:30 GMT, while the U.S. has no releases.
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