© Dukascopy Bank SA
In course of the previous trading week the Pound edged down to fresh five-and-a-half years lows against the US Dollar on Friday, as market turmoil in China bolstered safe haven demand for the Dollar, while uncertainty over the UK referendum on European Union membership also weighed. Meanwhile, the pair started the week on a rather positive note, retreating from the fresh 8-month lows, after the publication of UK construction data. The UK PMI was 57.8 points in December, down from a previous reading of 55.3 points. However, the Sterling was unable to sustain the bullish mood as risk aversion started to dominate global markets. Moreover, traders mostly ignored UK housing data and the improved initial jobless claims release, mostly due to the China. The second largest economy once again has stolen the biggest part of the world's attention with the second trading halt this week along with the most significant devaluation of the Yuan in last five months.
This week, 60% of all traders are expecting bearish development. Concerning the important fundamental news, some of the data has already been published, which may indicate bearish trend for the pair. The UK industrial production, dropped 0.9% from the previous 1.7%, while manufacturing production, in turn, lost –1.2%. Moreover, traders could pay attention to the BoE's Governor Mark Carney speech in the same day. Additionally, the US is to round up the week with reports on retail sales and preliminary data on consumer sentiment.
© Dukascopy Bank SA