GBP/USD Daily Outlook for April 21, 2011

A parade of UK data will be due at 08:30 which will probably affect the pair’s movement. Public finances deficit is predicted to widen to 14.0 billion pounds in March from the prior 7.0 billion pounds. Also, retail sales with auto fuel are estimated to record 0.5% drop from the prior 0.8% drop.

A widened public finance deficit and slight improvement in retail sales may push the pair to the downside, especially if US data released later in the day showed improvement. As of 12:30 GMT, the US will release initial claims for April 16 with expectations showing that number of people applying for jobless benefits decreased to 393,000 from 412,000 a weak earlier. Other data from the US, including leading indicators and Philadelphia Fed, are due at 14:00 GMT.

Moreover, minutes for April’s rate decision released on Tuesday caused the pair to decline, yet on the daily basis the pair showed upside tendency amid the weakness of the dollar and risk appetite in the market after the release of upbeat data and earnings from Europe and US.

The split among policy makers has raised suspicions with regard MPC member’s ability to shore up the economy where there seems to be a trade off between boosting growth and lowering inflation.

Yesterday, US existing home sales for the month of March came in at 3.7% rise compared with the revised 8.9% drop in February, but it could not gave much support to the dollar.

The outlook for the pair remains unclear as both BoE and the Fed hold their monetary policy and postpone any intervention.

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