© Dukascopy Bank SA
In course of the previous trading week the Pound edged down to fresh 17-month lows against the US Dollar on Monday, weighed by data showing the UK construction sector activity expanding at slower rate in December, while demand for the Greenback continued to be broadly supported. The closely watched Markit PMI fell to 57.6 points in December from 59.4 a month earlier. Moreover, the Cable continued its drop on Tuesday, after data showed the UK Markit Services PMI decreasing to 55.8 points last month, down from a reading of 58.6 points in November. On Thursday, the pair resumed negative tendency and reached the lowest level in 18 months, while the Bank of England's interest rate decision stayed the same and equals to 0.5%. Nevertheless, the Pound managed to increase on Friday, pulling away from 18-month lows, after the release of positive UK manufacturing and trade balance data. Manufacturing production for November soared 2.7% on the yearly basis from a previous increase of 1.7%, while trade deficit, in turn, slipped to 8.488 billion pounds.
This week, Dukascopy traders were equally divided in their opinions. However, almost 24% of all votes are placed between 1.52 and 1.53 level. Concerning important fundamental news, some part of data has already been published, which may indicate bearish trend for the pair. UK core CPI rose to 1.3% in December, while headline reading, in turn, dropped to 0.5% from 1.0%. Moreover, traders may pay attention to the BoE Governor Mark Carney's speech which is scheduled to take place on Wednesday. Additionally from the US side, market participants may follow statistics on the core CPI, which is, however, expected to stay unchanged. This data will be released on Friday.
© Dukascopy Bank SA