The dollar failed to correct its position yesterday, due to the fact that all the outgoing data turned out to be completely different than expected. In particular, the pound was able to strengthen strongly against the background of data on state borrowings and the CBI report on industrial orders. Public borrowings in the UK increased by £ 1.0 billion, which was significantly lower than the projected £ 4.4 billion. The CBI report, of course, showed a reduction in orders from 17 to 14 but expected 13. In Europe, the ZEW economic sentiment index rose from 29.0 to 31.8 with a forecast of 29.7. Thus, there was not a single reason for the growth of the dollar.
Today, the dollar does not have many chances to strengthen its positions. On the one hand, the preliminary data on business activity indices in Europe are expected to show a decline. The index of business activity in the manufacturing sector may decline from 60.6 to 60.3, and in the services sector, from 56.6 to 56.4. As a result, the composite index may decrease from 58.1 to 57.9. However, similar data in the US should show approximately the same. In particular, the production index may decrease from 55.1 to 55.0, but in the service sector, it should grow from 53.7 to 54.0. Nevertheless, the composite index is projected to decrease from 54.1 to 53.5. But worst of all, it is expected that sales in the secondary housing market will decrease by 2.2%. As for the pound, the data on the labor market in the UK may be neutral, which follows from the forecasts. The unemployment rate itself, and the growth rate of wages should remain unchanged.
The euro/dollar pair will consolidate at 1.2300.
The pound/dollar pair, if all forecasts are confirmed, can still grow to 1.4075.