The unexpected postponement of construction data in the United States somewhat surprised market participants. After all, American statistics are the most efficient and reliable. Everything is always published strictly on time. And the United Kingdom sinned most of all with such tricks. And even then - only all sorts of private agencies that publish various data on housing prices. And here it is. The situation is really out of the ordinary. So the somewhat discouraged market participants had no idea what to do or how to do it. As a result, the trends that were set at the very beginning of the day continued until the close of trading.
o the pound, albeit slightly, is still declining. Moreover, its decline was steady. And the reason is incredibly simple - inflation in the UK declined from 1.5% to 0.8%. Moreover, if you look at the monthly data, then consumer prices also declined by 0.2%. Of course, it is too early to talk about deflation, but everything goes to that.
Inflation (UK):
On the other side of the English Channel, inflation also quickly declined from 0.7% to 0.3%. But the single European currency did not fall in price, but slightly grew. And the thing is that even preliminary data showed about the same results, and investors have long laid this sad fact in the value of the single European currency. Well, the growth was largely due to the expectation of the publication of US construction data. After all, they were expecting a serious drop in the volume of construction and the number of permits issued for this very construction. And their publication was canceled. The surprise was so strong that the single European currency continued a slow rise. Investors simply did not know what to do.
Inflation (Europe):
Today, preliminary data on business activity indexes in Europe will be published, which should show that the economy is beginning to show at least some signs of recovery. In particular, the index of business activity in the manufacturing sector can grow from 33.4 to 40.0. In the service sector, growth is expected from 12.0 to 26.0. As a result, the composite business activity index should grow from 13.6 to 27.0. And although the values are extremely low, the fact of a change in trend from a decrease to a growth should lead to the strengthening of the single European currency. But we will see it only tomorrow. The thing is that today is a holiday in Europe and European traders will celebrate the Ascension Day.
Composite Business Activity Index (Europe):
Anything like this is not celebrated on Foggy Albion, and there's a full-time work day. If, of course, this term is generally applicable in the current situation. Nevertheless, banks and the exchange are working. So the market will be somewhat more lively. So, the index of business activity in the manufacturing sector should rise from 32.6 to 34.0. In the service sector, growth is expected from 13.4 to 21.0. As a result of all this, the composite index of business activity can grow from 13.8 to 22.0. And there is practically no doubt that this will allow the pound to somewhat strengthen its position.
Composite Business Activity Index (UK):
At the same time, growth in business activity indices is forecasted not only in the Old World, but also in the New. In particular, the index of business activity in the manufacturing sector can grow from 36.1 to 39.0. In the service sector, growth is expected from 26.7 to 32.0. Thus, the composite index of business activity can grow from 27.0 to 32.5. However, optimism for the dollar will be restrained by the next data on applications for unemployment benefits. And although the number of initial applications should continue to decrease,still 2,290 thousand requests - this is still very, very much. Moreover, the new maximum should be set for the number of repeated requests, which should be as much as 24,500 thousand. In other words, unemployment in the United States continues to grow. Another thing is that everyone is already tired of bad news, and even a hint of a possible improvement in the situation in the form of an increase in business sentiment, which reflects the business activity indices, is an extremely positive factor.
Repeated Unemployment Claims (United States):
The euro/dollar currency pair found resistance within the psychological level of 1.1000, eventually slowing down a previously set upward tact and, as a fact, forming a rebound. It can be assumed that a variable fluctuation within the range of 1.0950 / 1.0990, where in case the price is consolidated lower than 1.0940, the main movement is possible in the direction of the level of 1.0850.
After a short stagnation, the pound/dollar currency pair managed to partially restore short positions, lowering the quote to within 1.2180. It can be assumed that if the price consolidates below the level of 1.2180, we will have a local move to the level of 1.2150, where even if the price consolidated below 1.2140, the main movement will open in the direction of the minimum of May 18.
