The pound strengthened yesterday by more than a hundred points, which was due to several factors. Thus, the index of business activity in the UK construction sector decreased from 46.0 to 45.9, which was welcomed by the market, as the expected reduction to 43.8. But US statistics was not so joyful. Of course, personal spending rose by 0.4%, increasing inflation expectations, however, is not the first month running costs are rising faster than revenues.
Personal incomes themselves rose 0.2%, slightly worse than expected. Moreover, if the trend continues, it could trigger a sharp decline in consumer activity. Also, the American Petroleum Institute said on the reduction of stocks of crude oil and petroleum products by 1.3 million barrels, although it had no effect on oil prices. Another positive factor was the growth in car sales from 16.7 million to 17.9 million. However, despite the good statistics, the dollar became cheaper because of the fear of reduction in consumer activity, which clearly puts an end to the possibility of increasing the refinancing rate.
Today is expected to reduce the index of business activity in the UK services from 52.3 to 47.4. The composite index should be reduced from 52.4 to 47.7. The strong reduction in all indices in the UK is a direct result of the uncertainty caused by Brexit.
No less interesting are and the US data. Thus, the index of business activity in the services sector is expected to decline from 51.4 to 50.9, but the composite index may rise from 51.2 to 51.5. Important will e ADP data, which may show the growth of employment by 170 thousand, that at the current level of unemployment is a very good result. The US Department of Energy can confirm the reduction of stocks of crude oil and petroleum products by 1.8 million barrels, but given the ADP data and the fact that the market ignored the data of the American Petroleum Institute yesterday, they are unlikely to have a significant impact.
All forecasts and expectations clearly point to the weakening of the pound, and as a reference acts 1.31.