Last week, the U.S. dollar gained some ground against other world currencies amid a lot of turbulence. The greenback started off the final quarter of 2018 with some fresh gains. Powell’s hawkish words, soaring yields, and upbeat data contributed to the gains. The ISM Non-Manufacturing index hit the 61.6 level, the highest ever on record. However, the Non-Farm Payrolls data came in mixed with an addition of 134,000 jobs. However, upward revisions and moderate wages increase brought about some balance to the economic scenario.
The Euro suffered because of the continuing Italian crisis, while the British pound struggled due to growing concerns as regards the stability of the government amid maneuvers of Boris Johnson and the questions related to the Irish border. The Canadian Dollar recorded strong gains after the U.S. and Canada reached a new NAFTA agreement framework referred to as USMCA. Further, the USD/JPY pair hit new highs, while the Australian dollar following the RBA rate decision.
In the second week of the final quarter of this year, the US inflation data stands. In the U.K., the Brexit tension is rising amid mid-term elections. Here is an outlook on the key releases scheduled for the upcoming week:
#1: U.K. GDP (10/10/2018 Wednesday 08:30 GMT)
On a month-on-month basis, the U.K.’s GDP expanded by 0.3 percent in July, following on the 0.1 percent growth recorded in the prior month. Analysts had expected the British economy to grow by 0.2 percent. In August, the economic growth is projected to slow down to 0.1 percent because of Brexit worries.
#2: U.K. Manufacturing Production (10/10/2018 Wednesday 08:30 GMT)
In the U.K., manufacturing production declined by 0.2 percent, against analysts’ expectations for a 0.2 percent gain, after registering a 0.4 percent increase in June. Factory output dropped because of negative growth in production in pharmaceutical products, machinery and equipment, rubber and plastics, and textiles and leather sectors. The largest upward contribution to production came from metal products segment. It is expected that the manufacturing production will increase by 0.1 percent in September.
#3: U.S. PPI (10/10/2018 Wednesday 12:30 GMT)
In the U.S., producer prices for final demand goods unexpectedly fell 0.1 percent in the month of August after remaining unchanged in July. The reading for the month missed analysts’ expectations for an increase of 0.2 percent in producer prices. This is the first monthly decline in producer prices ever since February 2017. Prices of services declined 0.1 percent for the second month in a row because of a 0.9 percent decline in trade services cost. On the other hand, the prices of goods remained unchanged, following the 0.1 percent increase in July. Food prices dropped but energy prices increased. The core PPI, which excludes energy and food, fell 0.1 percent in the month of August against analysts’ expectations for a 0.2 percent increase. Forecast for September 2018: an increase of 02 percent in producer prices is on the cards
#4: U.S. CPI (10/11/2018 Thursday 12:30 GMT)
In the U.S., consumer prices rose by 0.2 percent on a month-over-month basis in August, the same as in the previous month. The reading for August matched with analysts’ expectations. Increases in the prices of shelter and energy mainly contributed to the increase on a seasonally adjusted basis. Forecast for September 2018: an increase of 0.2 percent is expected
#5: U.S. Core CPI (10/11/2018 Thursday 12:30 GMT)
In the U.S., the core consumer prices, excluding that of energy and food, rose by 0.1 percent on a month-over-month in August, easing from the 0.2 percent gain reported in the prior month. However, the reading for the month came in below analysts’ expectations for a 0.2 percent gain. This is by far the smallest core inflation figure for a month since April this year. Forecast for September 2018: an increase of 0.2 percent is expected