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Currency Markets to Look Past UK Data, Focus on US Calendar

Currency Markets to Look Past UK Data, Focus on US Calendar

Ilya Spivak, Head Strategist, APAC

Talking Points

  • BOE Minutes, UK Jobless Claims Unlikely to Generate Strong Reaction
  • US Dollar Likely to Rise if Empire Manufacturing Gauge Surprises Higher

UK economic releases dominate the calendar in European hours. First, the Bank of England will release minutes from Augusts’ monetary policy meeting. The outcome is unlikely to stir a strong reaction from price action considering investors have had ample time to digest the quarterly inflation report that served as the basis for the sit-down. This suggests the release is unlikely to offer anything materially new that has not been priced in already. Separately, Jobless Claims are expected to post a 6K increase in July. A print in line with forecasts would fall closely in line with results recorded in May and June as well the 12-month running average (6.45K), meaning it too would largely fall in line with the priced-in status quo.

Later in the session, the spotlight will shift to the US Empire Manufacturing gauge of factory-sector performance in New York State. The reading marks the first data point in the August batch of regional activity surveys and will help gauge the degree of follow-through on the apparent pickup in pace of the US recovery in July. Expectations point to a narrow pullback to 7.0 after a print at 7.39 in the prior month. The markets’ response to yesterday’s better-than-expected US Retail Sales figures suggests a stronger print is likely to be interpreted in terms of reducing Fed stimulus bets, boosting the US Dollar amid receding dilution fears. Needless to say, a softer result can be expected to produce the opposite response.

Asia Session: What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

0:30

AUD

Westpac Consumer Confidence Index (AUG)

96.6

-

99.1

0:30

AUD

Westpac Consumer Confidence (AUG)

-2.5%

-

3.7%

1:30

AUD

Wage Cost Index (QoQ) (2Q)

1.0%

0.9%

0.9%

1:30

AUD

Wage Cost Index (YoY) (2Q)

3.7%

3.5%

3.6% (R-)

Euro Session: What to Expect

GMT

CCY

EVENT

EXP

PREV

IMPACT

8:30

GBP

Bank of England Minutes

-

-

High

8:30

GBP

Jobless Claims Change (JUL)

6.0K

6.1K

High

8:30

GBP

Claimant Count Rate (JUL)

4.9%

4.9%

Medium

8:30

GBP

ILO Unemployment Rate (3M) (JUN)

8.1%

8.1%

Medium

8:30

GBP

Average Weekly Earnings (3M/YoY) (JUN)

1.7%

1.5%

Low

8:30

GBP

Weekly Earnings ex Bonus (3M/YoY) (JUN)

1.9%

1.8%

Low

8:30

GBP

Employment Change (3M/3M) (JUN)

165K

181K

Low

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.2298

1.2367

GBPUSD

1.5534

1.5714

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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