The Pound (GBP) is forecast to receive support from Wednesday’s Manufacturing and Industrial Production reports in a session, which looks set to see muted trading ahead of major Central Bank Meetings in the UK and USA.
Against the Euro, the Pound is likely to make further gains and push higher above the 1.26 level as data out of Italy is now likely to show a fall after Tuesday’s disappointing Italian Services PMI data.
A report out of the wider Eurozone also came in below economist expectations. Italy’s services purchasing managers index slowed to 52.8 in July from 53.9 in June.
Economists had been expecting a reading of 54.0.
Wednesday’s data is expected to show that house prices in the UK increased by 0.3% in July. Manufacturing Production data is expected to increase by 0.7% after the previous month’s decline of -1.3%.
Industrial Production meanwhile is forecast to ease from May’s figure of 3.7% to 2.3% on a year on year basis.
Against the US Dollar however the Pound is likely to remain range bound as the USA’s balance of trade data is expected to show a narrowing of the deficit.
Trade is expected to be light as the markets turn their attention to the Bank of England and European Central Bank’s latest policy meetings. Speculation is growing that the BoE could raise interest rates before the end of the year.
The ECB meanwhile could announce new monetary easing measures in an effort to tackle the threat of deflation in the single currency region.
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