It’s the last full week of the Bush administration and the US dollar continues to grind higher against the Euro, British pound and Japanese Yen.  Compared to yesterday’s $1.4820 close in the British Pound, the greenback has made substantial gains trading at $1.4547 heading into New York afternoon trading.  However, there’s plenty that market participants continue to anticipate with a slew of economic data set for the next two days.

Key Events To Consider

Advanced Retail Sales – Expected to improve upon the dismal 1.6 percent slump, forecasts are ranging around an improvement of a minor decline of 1.3 percent.  The anticipation is justified as the figures will likely see some additions from the holiday season, excluding any damaging shortfalls in automobile spending.

European Central Bank Announcement – Continued reduction in the European interest rate is expected as central banks have essentially taken on a global quantitative easing stance.  With the rate currently standing at 2.50 percent, traders continue to expect a reduction of 50 basis points to 2 percent after it is all said and done.  Analysts will be on the look out for further easing hints as ECB President Trichet is likely to comment on economic health and inflationary outlooks following the decision.

Philly & Empire Manufacturing Surveys – Although manufacturing activity will be evaluated in both reports, more emphasis may be pointed towards the employment components of the surveys.  A rebound from a seven year low in the employment component of the Empire survey can be expected.  But don’t hold your breath over it.

With all the hoopla surrounding the inaugural events on January 20th, markets may look to pare back some of the action towards the end of this week.  Incidentally, traders will also be preparing for a three day weekend on the US equity side, which may keep currency markets a bit muted.

Tags: British Pound, Euro, Inauguration Weekend

This entry was posted on Tuesday, January 13th, 2009 at 1:19 pm and is filed under British Pound, Currency Trading, Euro. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.