Daily Insight

The Pound found further support against the majors yesterday, firming an additional 0.1% against both the Euro and the Dollar as we break back above 1.9000. The Confederation of British Industry released their monthly industrial trends survey yesterday, which unexpectedly showed a pick-up in the sector for November following last month's weakness. The report showed that demand for British made goods was still high despite the Pound's strength over the past quarter and gave way to suggestions that the Bank of England may continue monetary tightening in 2007. The focus this week in terms of economic data will be the minutes from the BoE's last policy meeting released this morning. The MPC elected to lift UK interest rates for the second time this year in November and it will be interesting to gauge just how the 8-strong committee voted and the language and tone of the report may also provide some insights into future policy.

The Euro managed to hold firm against the Dollar yesterday despite a damaging report on French gross domestic product, which showed that the economy failed to expand in the third quarter following the fastest growth in nearly six years at the beginning of 2006. However, the Euro has received a modest boost this morning as a separate report on French consumer spending showed an unexpected rise in October after unemployment fell to a five-year low. In addition, Euro-zone industrial orders, due for release later this morning, are expected to fall lower as demand from the U.S dwindles in the face of slowing economic growth.

With the Thanksgiving holidays dominating the American calendar this week, there has been a distinct lack of economic data to drive the Dollar. However, a report this afternoon on U.S consumer confidence is expected to remain at an elevated level in the month of November after achieving a 15-month high in October. In recent months, significantly lower petrol prices and a strong labour market has helped supplement the dramatic slump in housing this year as the Federal Reserve raised U.S interest rates seventeen times over a 2-year campaign. The University of Michigan's final index of consumer sentiment is widely anticipated to show a modest decline towards a reading of 93.3 in November. While elsewhere, a separate report on initial jobless claims is expected to show that the number of Americans filing for benefits remained largely unchanged in the last week.

Data Released 22nd November

UK 09:30 BoE MPC Minutes

EU 10:00 Industrial Orders (September)

U.S 13:30 Initial Jobless Claims (w/e 18th November)
U.S 15:00 Michigan Sentiment (November Final)

written by Adam Solomon