The dollar continued its victorious rally against the single European currency and the pound. Blame for the next defeat, they must be exceptionally themselves. Thus, data on the labor market in the UK has rather showed a complete decline in the morale of personnel. Thus, the number of applications for unemployment benefits rose from 22.6 thousand to 24.7 thousand. despite the drop in the unemployment rate from 3.9% to 3.8%. Such differences are possible due to the fact that the unemployment rate is shown in March and the number of applications for benefits in April. That is, unemployment data for April will almost certainly show growth. But what is more important is that the rate of growth of average wages slowed down from 3.4% to 3.3%. Also, taking into account bonuses and more precisely, remuneration for overtime from 3.5% to 3.2%. In other words, revenue growth is slowing. Her Majesty’s subjects themselves are not particularly eager to bend their backs for the benefit of investors. Yes and European industry data showed a complete lack of readiness to provide a single European currency with ammunition, as the pace of decline in industrial production accelerated from -0.3% to -0.6%. It is true that the predicted acceleration of the decline to -0.8%, hence, that the disaster is not so terrible.
Today, the dollar can continue its victorious march. Particularly in Europe, there is a second estimate of GDP for the first quarter, which may show that the rate of economic growth did not remain the same, but slowed down from 1.2% to 1.1%. In the United States, there are data on retail sales and industrial production and forecasts for which are very good. Although industrial production growth rates may remain unchanged, retail sales should show acceleration from 3.6% to 3.8%. Thus, investors have a few more reasons to buy the dollar.
Thus, the single European currency is likely to fall to 1.1175.
Of course, the slowdown of the European economy does not directly affect the pound but indirectly, it will have a negative impact. The increase in consumer activity in the United States is enough. Hence, the pound is likely to fall towards 1.2850.
The material has been provided by InstaForex Company – www.instaforex.com