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Earnings season continues next week with reports from Facebook and Ford. LCG's Head Analyst Brenda Kelly says indices are still sailing close to the wind and having recorded a new high for the year, the question remains whether we can seek even higher highs.
The US dollar has been under pressure, but has managed to reverse some of the recent losses with the dollar index finding support at 94.00 for the time being. Preliminary UK GDP and advance US GDP are out next week. Brenda believes the cable will undergo some volatility in both directions.
The FOMC statement will also be utilised by many as a reason to sell rallies in the dollar. A lot of US data of late would suggest that rate normalisation is something that Janet Yellen will consider towards the back end of the year rather than in the near term. With durable goods orders and consumer confidence both slated for release on Wednesday, further insight into the state of the economy and the underlying sentiment should be gleaned.
USDJPY has surprised some of the Yen bulls lately, but with a plethora of data out from Japan on Friday, Brenda believes we will get to see just how committed the BOJ is to stoking inflation with ‘double barrelled’ stimulus.