The pound continues to lose its positions, though not at the same pace as the single European currency. In part, this is due to the fact that absolutely negative data on the UK did not appear. Data on the labor market were published, which were rather multi-directional. On one hand, the unemployment rate remained unchanged, and the growth rate of wages accelerated from 2.8% to 2.9%. However, these are salaries without premiums, whereas taking into account premiums, their growth rates have slowed from 2.8% to 2.6%, which investors never like. Also, an alarming call sounded data on the number of applications for unemployment benefits, which increased by 31.2 thousand.
At the same time, the US statistics was not unambiguous. On the one hand, there were many reasons for concern, as the growth rate of retail sales slowed from 4.9% to 4.7%. The number of construction projects started decreased by 3.7%, and construction permits issued by 1.8%. The growth rate of industrial production slowed from 3.7% to 3.5%. However, commercial stocks stopped growing, and the number of applications for unemployment benefits decreased by 76 thousand.
As uncool as it is, but special reasons for the growth of the pound this week is not expected. The fact is, the amount of government borrowing can increase by 7.0 billion pounds, which is usually poorly perceived by investors. The worst thing for the pound is that inflation should slow from 2.5% to 2.3%, which puts an end to the prospects for raising the refinancing rate of the Bank of England. At least until the end of this year. Only retail sales, whose growth rates should accelerate from 1.1% to 1.4%, will somewhat brighten up the picture, and will not allow the pound to lose its positions with redoubled force.
In turn, the United States is expected to have mixed statistics. So, the index in the service sector should grow from 54.6 to 54.9, and the production index may decrease from 56.5 to 56.3. However, the weight of the index in the service sector is much larger, so the composite index should increase from 54.9 to 55.0. Also, housing prices can increase by 0.5%, and home sales in the secondary market by 0.3%. The data on applications for unemployment benefits, as their number should increase by 56 thousand, can also be negative. Also, orders for durable goods can be attributed to bad news, as their volume should be reduced by 1.4%. But all the negative will be smoothed out with the content of the text of the minutes of the meeting of the Federal Commission for open market operations, as it hopes to find instructions on the timing of the next increase in the refinancing rate.
Given the completely different expectations about the policy of the Fed and the Bank of England, the overall positive situation for the dollar will continue. By the end of the week, the pound has all chances to fall in price to 1.3350.