It appears that the British Pound will continue to face pressure against a basket of currencies in the coming days, and a surprise ‘hawkish’ forecast from the Bank of England on Thursday will be necessary to shift market sentiment. The Bank of England will ultimately be the British Pound’s high point this coming week, and any gains in the currency will probably be limited by the uncertainties surrounding the event.

The release of the October Eurozone inflation numbers is the big event for the Euro in the upcoming week. This could aid in stabilising market expectations ahead of the European Central Bank’s increasingly significant interest rate announcement on December 14. As a general rule, high inflation data increases the likelihood that the ECB will adopt a “hawkish” stance in December, which is good news for the euro.

As investors focus on the data and events calendar, the US dollar appears to be consolidating its recent gains. At now, the threshold for additional Dollar strength seems high, as a growing number of analysts predict that a strong payrolls report and an unexpectedly ‘hawkish’ Federal Reserve will be necessary to drive the currency higher.

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