The US dollar rose to its highest level in 16 weeks at the beginning of this week following the announcement of the midterm results of the US Congress and the Fed's confirmation of the rate hike at its last meeting last week.
This week, a number of important economic data will be released, topped by inflation figures in a number of major economies.
Inflation and employment data in the UK
Inflation in the UK slowed in September as the CPI rose by 2.4% after rising by 2.7% in August and is expected to rise by 2.5% in October. The rise in wages helped with a slower pace of price increases in real wage growth, that wages is expected to rise by 3% in the three months to September; unemployment is also expected to stabilize at 4%.
Japanese growth data
Japan's economy grew by 0.7% in the second quarter of 2018, but inflation remains the key factor for the Bank of Japan waiting it to reach its target of 2%. Japan's economy is expected to contract 0.2% in the third quarter of 2018.
Growth and inflation data in the euro area
The Eurozone economy is expected to grow by 0.2% QoQ in the third quarter and 1.7% YoY, also attention will be directed to German growth data, where GDP is expected to slow to 1.3% on yearly basis and contract on a quarterly basis by 0.1%.
Also, the markets will follow the final inflation data for the euro area as the consumer price index is expected to rise by 2.2% in October.
US inflation data
US inflation data is expected to rise by 0.3% on a monthly basis and by 2.5% on yearly basis. Rising inflation will be one of the factors that will stimulate the Federal Reserve to continue its rate hike path.
Australian Employment Data
The Australian economy added 5.6 thousand jobs in September, and unemployment fell to 5%. The economy is expected to add around 20,000 jobs in October and unemployment will rise slightly to 5.1 percent.
