Today is thin on the ground data wise for the U.K and indeed Sterling however there are a couple of releases of note for the Eurozone and the U.S.A today.
The Eurozone releases inflation data this morning and we are due to see retail sales data out at 13:30pm.
The retail sales are expected to have risen month on month so any change to this could cause high Dollar volatility.
Tuesday
Tuesday morning brings the U.K's turn to release inflationary data with the CPI(Consumer Price Index) and RPI (Retail Price Index) due at 09:30am, once again changes to the expected figures could lead to movements for the Pound. During the course of the day the Bank of England also releases the Inflation letter which details how Mervyn King plans on dealing with inflation in the near future.
The afternoon brings further data from the U.S with inflation and industrial production data at 13:30 and 14:15 respectively.
Wednesday
Wednesday morning sees the release of the Bank of England minutes and could potentially be the biggest market mover of the week for those with a vested interest in the strength of Sterling.
The minutes will outline what was discussed at the last BOE interest rate decision meeting and may give indications as to how the BOE will deal with the ecionomic situation in the future and many investors will be eagerly awaiting the mention of any further Quantitative easing. Should further QE be mentioned we copuld see Sterling weakness and should an indication be given that this program may nopw be halted then Sterling could well gain ground.
Mervyn King (Governor of the BOE) has recently mentioned that they will not rule out further QE so I would expect Sterling to drop slightly during this release, however anything can happen.
Canada and the States also will release inflationary data at 12:00pm and 13:30pm respectively so expect volatility.
Thursday
Thursday is a little quieter with Switzerland releasibng their trade balance figures in early morning trading and the U.K will present their retail sales data at 09:30am - as with most data releases any change to the expected figure of 2.4% should bring market movements.
Friday
In the early hours of Friday morning the Bank of Japan release their interest rate decision... no change is expect but comments soon after may lead to volatility for the Yen, the only other release of note for the day is the German Producer Price Index. This inflation data is another one for the early birds is due at 07:00am.
In short, the week ahead promises to be an interesting one and my personal view at the time of writing this report is that by the end of the week Sterling may have slightly weakened due to QE being mentioned in thje minutes and generally confidence beiong higher in other economies as opposed to ours.
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