GBP has a strong week, while poor German data hinders EUR

Last week we saw the pound claw back losses incurred following the negative inflation data we saw released at the start of the week, which had indicated that the UK had fallen into negative territory at -0.1% (previously it had been at 0.0%). There was also positivity seen with a decrease in unemployment to 5.4% from a previous level of 5.5%, and the average earnings level was also seen to rise by 3%.

It won’t be a very busy week for data this week, but we will see the Bank of England’s, Mark Carney, give a speech mid-week that may offer hints on the interest rate situation. There will also be net borrowing numbers and retail sales data out, too.

In Europe, EUR held on to the gains it made against the dollar over the course of the week, but relinquished those gained against the pound. The Germans had a poor week because of weak ZEW numbers –the worst figure in over a year – whilst their CPI also underperformed. The whole VW scandal has also put a massive dent in economic confidence levels.

This week, the European Central Bank will release its interest rate statement – which will also tie into the future of QE for Europe. There will also be German and French manufacturing PMI data released.

In the US, the dollar had something of an uphill battle last week on the back of speculation that the forthcoming interest rate hike might be delayed further. We also saw retail sales drop by 0.3%, as well as producer prices which fell in September by the most in a year at -0.5%.

There won’t be much out this week data-wise aside from unemployment claims and building permits. Interest rate speculation will also continue to fuel things as well – but this is starting to look more and more unlikely to happen in 2015.