Following a barrage of significant economic reports released last week, we can expect a relatively quiet week in terms of data with the focus falling on the minutes from the Bank of England’s last policy meeting where the MPC elected to raise UK interest rates to 5.0%. The language and tone of the minutes will prove significant in determining the outlook for future monetary policy but the Pound may come under further pressure if the eight-strong committee were divided in the decision to raise rates by a quarter-point earlier this month. Over the past week the Pound has continued to deteriorate against the majors as weak inflation numbers diminished the prospect of any further monetary tightening this year. The Pound has received a timely boost this morning following a report on the UK housing market as prices rose at the fastest annual pace in two years for the month of November.
The positive sentiment surrounding the Euro has gathered momentum in recent weeks and that trend looks set to continue amid a sparse supply of European economic reports released this week. The German Ifo index into business confidence is widely expected to remain at a relatively low level despite the obvious improvement in economic growth this year, which has accelerated at the fastest pace since 2000. Concerns and uncertainty surrounding the planned VAT increase at the start of next year will also have an impact on German retail sales, which is expected to bounce back in October as consumer’s flock to the highstreet to avoid paying a higher tax percentage.
With the Thanksgiving holiday dominating the American calendar this week, the Dollar may be left exposed amid a sparse supply of significant economic events with the focus falling on the final estimate of the Michigan sentiment survey for November. The index is widely expected to show a modest increase from the previous month as consumer spending continues to show signs of a revival as we approach the festive period.
Data Released 20th November
UK 09:30 M4 Sterling Lending (October)
UK 09:30 PSNCR (October)
written by Adam Solomon
Related posts:
- The Euro was given a timely boost yesterday as Business Confidence in Germany jumps to the highest level in 15-years
- The Pound continues to make gains as growth in the UK economy accelerates to the fastest pace in two years
- Euro-zone manufacturing expands at the fastest pace in six years as the ECB considers a more aggressive move towards monetary tightening
- The Euro may receive a timely boost ahead of the ECB interest rate announcement and press conference
- The Euro gains against Sterling following the biggest increase in German Producer Prices in 24-years
