Thursday June 30
The pound fell against the dollar, paring three days of advance, after the drop in consumer confidence to -25 in June compared with -21 in May, adding to speculations the sluggish second quarter growth would induce the BoE to keep interest rate on hold in July.
The lackluster data from the UK economy along with the latest announcements by policy makers suggest that there will be no tightening until late this year or even in 2012 which is putting downside pressure on the sterling.
In the US, initial jobless claims retreated to 428,000 in the week ended June 18 from 429,000 a week before.
Friday July 1
The main focus will be on manufacturing data in both economies as at 08:30 GMT UK will release PMI manufacturing for June with expectations to show advance to 52.5 from 52.1 a month earlier. On the other hand, ISM manufacturing is set to decline to 52.0 in June from 53.5 in May, as of 14:00 GMT. Yet, before the release of ISM manufacturing, at 13:55 GMT, investors will follow University of Michigan confidence which is predicted to advance to 72.0 in June from 71.8.
Manufacturing data from both economies may have an impact on the pair, especially after the slowdown seen in major econmeis in the wake of the worldwide sluggish growth in the second quarter.
The outlook for the pair remains to the downside as the dollar may benefit from the end of the QE2 as its supply will decrease where the outlook for the two economies is weak amid the downbeat data released recently.
Written by ForexMansion.com