Pound Sterling (GBP)
There is very little in terms of domestic data releases scheduled for the UK next week, which may have a restraining impact on the Pound Sterling exchange rate next week.
On Thursday there are a couple of domestic data releases in the form of the Lloyds Business Barometer and CBI Reported Sales. Neither of these data releases will hold much weight economically and are unlikely to affect Sterling movement.
Friday of next week will see the release of Hometrack Housing data but, once again, the data will have little influence economically. The GFK Consumer Confidence Survey will be of a little more importance and is therefore more likely to dictate movement for the Pound.
Looking Further Ahead…
Next month will see the release of some important data from the Bank of England. The most influential, in terms of economic weighting and currency movement, is the Monetary Policy Committee Meeting and Announcement on September 4, 2014. With all the recent confusion over the timing of an interest rate hike; traders will be looking to that meeting to provide a solid outlook for the raising of rates.
Euro (EUR)
On Monday there will be some European domestic data which is likely to affect the Euro. The German IFO Business Climate will be of interest as it is one of the country’s key business sentiment surveys. The survey is conducted monthly, querying German firms on the current German business climate as well as their expectations for the next six months. The German IFO Current Assessment and Expectations results will be equally influential in terms of Euro movement.
On Wednesday the German GfK Consumer Confidence Survey is due to be released. Consumer Confidence is important because it measures the level of confidence households have in economic performance. Generally rising consumer confidence acts as a precursor to higher consumer expenditures which drive economic expansion.
Thursday of next week will be heavy in terms of European domestic data. The packed docket will see several releases of varying economic influence. The German Unemployment Change data and seasonally adjusted German Unemployment Rate will both be highly influential market movers. The German Consumer Price Index (CPI) will also be of great importance. The CPI is the headline inflation figure that indicates the strength of domestic inflationary pressures.
There will also be several important European domestic data releases on Friday. The Eurozone Unemployment Rate, Core Consumer Price Index and Consumer Price Index Estimate are ones to watch, especially given the general decline in the Eurozone over the course of August.
US Dollar (USD)
The US domestic data docket is consistently heavy throughout the course of next week.
On Monday the US Composite PMI and Services PMI will be of interest to those backing ‘Greenback’ (USD). Also New Home Sales will be an influential market mover. The figure is a timely gauge of housing market conditions, counting home sales when initial housing contracts are signed. Because New Home Sales usually trigger a sequence of consumption, they have significant market impact upon release.
Tuesday will be another packed domestic data docket for the US. Durable Goods Orders is perhaps the most prominent market-mover. Given that orders for goods have large sway over the actual production; this figure serves as an excellent forecast of U.S. output to come. Durable Goods are typically sensitive to economic changes. When consumers become sceptical about economic conditions, sales of durable goods are one of the first to be impacted since consumers can delay purchases of durable items, like cars and televisions, only spending money on necessities in times of economic hardship.
The US Durables Ex Transportation, House Price Index and House Price Purchasing Index will also provoke movement in the ‘Buck’ (USD).
Yet another significant data release on Tuesday will be US Consumer Confidence which is an assessment of consumer sentiment regarding business conditions, employment and personal income. Based on a representative sample of thousands of mail-in surveys, the Conference Board index has the largest pooling sample of any U.S. measure of consumer confidence. Consumer Confidence levels are generally linked with consumer spending. For instance, when consumer confidence is on the rise consumer spending tends to increase.
Wednesday’s only significant data release will be MBA Mortgage Applications. Due to the multiplier effect housing has on the rest of the economy, rising activity suggests increased household incomes and economic expansion.
Thursday will see the publication of another smorgasbord of market moving data. Second quarter Gross Domestic Product will be hugely influential for both US economic standing and the strength of ‘Greenback’. Those invested in the US Dollar will be hoping for confirmation of growth of 4.0%.
Personal Consumption, Gross Domestic Product Price Index, Core Personal Consumption Expenditure, Initial Jobless Claims and Pending Home Sales will also all be prominent market movers.
Friday of next week will see, yet again, several important US data publications. Perhaps most important, in terms of economic weighting, will be Core Personal Consumption Expenditure (PCE). The report is particularly valued for forecasting inflationary pressures. Taken in excess these high levels of consumption and production may lead to an overall increase in prices. Indeed, the Fed uses a measure of inflation derived from the PCE as their primary gauge of inflation.
Personal Income, Personal Spending, Chicago Purchasing Manager and the University of Michigan Confidence Report will all be of interest to those backing the US Dollar, and are all likely to influence the strength of the currency.
Looking Further Ahead…
On the 16th and 17th September the Federal Reserve will be having their FOMC Meeting. Given the increased pressure surrounding interest rate hikes; this meeting ought to be of particular importance.
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