Cable Hits Four Week High

Sterling saw some support off the back of the first results of Q2 Economic growth in the UK as it was printed 0.1% better than last month’s figure of 0.2% previously. Sterling-Dollar rose towards 1.3160 but later pulled back towards 1.3040. Sterling-Euro also picked up during the late morning session and broke through the 1.12 barrier reaching as high as 1.1230 in the afternoon however retracted to 1.1210 towards the end of the day. Euro-Dollar fell back into the 1.16 levels after yesterday’s 1.1700 rally.

Previous Day's Market Highlights

Sterling saw some support off the back of the first results of Q2 Economic growth in the UK as it was printed 0.1% better than last month’s figure of 0.2% previously. Sterling-Dollar rose towards 1.3160 but later pulled back towards 1.3040. Sterling-Euro also picked up during the late morning session and broke through the 1.12 barrier reaching as high as 1.1230 in the afternoon however retracted to 1.1210 towards the end of the day. Euro-Dollar fell back into the 1.16 levels after yesterday’s 1.1700 rally.
 
US data were overall bearish as New home sales change fell from 2.9% to 1.4% and yesterday’s Feds dovish meetings minutes. We saw the Dollar approached key support and extended its decline as traders selloff the greenback currency, as Federal Reserve indicate that weak inflation leaves interest rates on hold and leaving the start date for balance sheet normalization open. Sterling-Dollar rose to 1.3120 and is set to continue further depreciation as other major central banks appear to be moving toward less monetary policy accommodation as their economies improve.   

Today's Market Highlights

Despite GBP/EUR closing above 1.12, it continues to trade within a relative tight range. The other major pairs also display relatively muted sideways direction, awaiting fresh inputs. Overall, the EUR continues its steady upward trajectory versus a basket of its peers. EUR/USD is testing the 1.17 mark, having crossed that barrier for the first time since January 2015. Today’s calendar is very light on both sides of the Atlantic, as such markets will continue to digest the Fed’s policy statement yesterday. Cable trades significantly higher, currently above 1.31. USD saw weakness as inflation data disappointed, reducing pressure to hike interest rates a third time.

Today's Economic Calendar

Time Currency Release Consensus Previous
09:00 EUR M3 Money Supply y/y 5.0% 5.0%
09:30 USD Core Durable Goods Orders m/m 0.4% 0.3%
09:30 GBP BBA Mortgage Approvals (Jun) 240K 233K