Last week ended on a weaker note for Sterling following weak PMI data and weak retail sales numbers, this led to lower exchange rates against both the Euro and the Dollar. This week is the last week of the month going into the Holiday weekend in the U.S, so we do expect some profit taking going into the weekend, but before that, we do have some releases of interest, there are no high priority releases for the UK so we could have a pretty stable week for Sterling exchange rates.
Monday is a relatively uneventful day so we begin with Tuesday were we have U.S. consumer confidence, which is expected to rise to 111.60, and more importantly we have the FOMC minutes later in the evening round 7pm GMT. This release is important as markets are waiting to hear if the Fed is looking to do one more interest rate cut before the New Year- so far there is no real consensus after Fed Chair Powell stated that the economy isn’t showing any urgency, which is generally a good thing, so potentially the minutes may give us some guidance as to what we can expect in December from the Fed.
On Wednesday we have U.S Jobless claims data alongside Core PCE, which we are expecting to come out a little lower than last month, and most importantly we have GDP estimate data out of the U.S at the same time, which is expected to show a slight contraction to 2.8% in the last quarter, but still showing solid growth overall- which should bode well for the Greenback against most currencies.
On Thursday the main event is European consumer confidence data, which is still expected negative at -13.7, which should continue the Euro weakness trend we have been seeing, this will be followed by some German inflation data which should probably continue the same trend.
Friday again is very Euro focused with flash inflation data out, I am expecting this will show a slight rise in inflation as we have seen everywhere so far, alongside French GDP data. Overall this should be a relatively quiet week on the data front, however any geopolitical developments, specifically between Ukraine and Russia could have an effect on the markets.
GBP/EUR 1.1975 GBP/USD 1.2566 GBP/AED 4.6188
GBP/AUD 1.9296 GBP/CHF 1.1176 GBP/CAD 1.7541
GBP/NZD 2.1488 EUR/USD 1.0477 GBP/ZAR 22.6898