This week will be eventful, and the news flow will be quite dense. Most importantly, that the events which will take place this week will be very important for the markets and will have a strong influence to the movement of currency pairs.
Inflation in the UK
On Tuesday, will be published a block of data from the UK on Producer Price data and the Consumer Price Index. The increase of inflation in the United Kingdom will support sterling, but in the future this could negatively affect the country’s economy.
The UK Average Earnings Index
If wages will lag behind inflation, it will not only put temporary pressure on the British currency, but may lead to further weakening of other indicators, such as retail sales and household spending.
Inflation in the US
On the eve of the meeting of the Federal Reserve System, the decline of CPI may put pressure on the US dollar. In addition, expected that the retail sales will show lower results, which will even more exacerbate the situation.
Meeting of the Federal Open Market Committee
On Wednesday, the most important event will take place, which is able to determine the further movement of the US currency for the next few months. Besides the changing interest rates, will be very important with what rhetoric and forecasts will speak the head of the Federal Reserve. Only confirmation of the willingness of the American regulator to continue the process of tightening monetary policy will be able to return the US dollar to growth.
Meeting of the Bank of England
The English regulator will announce its decision on monetary policy on Thursday. Changes in the policy of the central bank is not expected, therefore the sterling can receive just local support with an optimistic forecast by the Bank of England. Because, now pound is subject to severe pressure from the political factors.