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Economic calendar: GBP could wobble as crucial data looms

Summary:

  • UK’s industrial and manufacturing production in the spotlight before noon
  • US PPI could shed light on tomorrow’s CPI reading
  • Dudley (FED) and Lowe (RBA) are slated to take the floor in upcoming hours

The RBNZ stole the show overnight when it comes the FX market substantially weakening the NZD. While we’re slowly moving to an end of the week, there are getting more important macroeconomic releases which could carry significant reverberations on currencies. Investors should keep a close eye especially on the GBP as well as USD as the two noteworthy prints are on the agenda for today.

9:30 am BST - UK’s industrial and manufacturing production: The British currency was substantially afflicted on the back of the latest BoE’s monetary policy decision as the bank chose to push back a projected first rate hike foreseeing just two rate increases during the next 3 years. It was a blow to the GBP which had performed well in a run-up to the decision. Nowadays, market’s attention turns to macro readings where today’s industrial output could result in a massive reaction on the currency. Moreover, let us recall that a recent print of manufacturing PMI turned out to rise which could bode quite well in terms of today’s data. Industrial output is anticipated to come in at -0.2% yoy, whereas manufacturing production is forecast at 0.7% yoy - both readings are for June.

1:30 pm BST: US PPI and weekly jobless claims: Although, PPI isn’t the most crucial inflation print as far as the US economy is concerned, it could offer a hint before tomorrow’s CPI report. There have been some assumptions of late that the weaker USD could shore up price dynamics going forward via a so-called pass-through effect, however it could be misleading as the US economy is decisively more services-consuming which hamstrings a net effect coming from the ex-change rate. Either way, PPI could help investors for sure to square their portfolios before the CPI report. PPI is expected to show 2.1% yoy in terms of a core gauge and 2.2% yoy as for a headline print. In turn, weekly jobless claims are forecast to come in at 240k.

3:00 pm BST - FED’s Dudley: Taking into account that the US dollar seems to try to lick its recent wounds any more constructive remarks coming from FOMC members could be helpful for the currency. Moreover, as we’re approaching another FED’s meeting in September, some clues as for the balance sheet run-off could be looked for as well.

Besides, RBA’s Lowe will be speaking at 00:30 am BST before House Economics Committee in Melbourne on Friday.

link do file download linkThe GBPUSD has failed to break a local resistance area so far which could suggest the pair might move down if industrial output falls short of estimations. Source: xStation5

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