Dollar Gains on Positive Data

The USD gained yesterday on broadly positive data. GDP data from the UK and Canada and Eurozone CPI are among today's key releases.

Previous Day's Market Highlights

The euro weakened to a one-week low against the dollar yesterday morning on concerns that Italy’s budget meeting would be delayed. The euro later gained on above-forecast German inflation figures.
 
The dollar strengthened in the afternoon, which pushed sterling-dollar back below 1.31. The greenback gained on largely positive economic data. This included confirmation of 4.2% economic growth in Q2 and above-forecast quarterly Personal Consumption Expenditures and Durable Goods Orders. However, some of the afternoon’s raft of releases disappointed, including core Durable Goods Orders and Pending Home Sales.
 
The day’s central bank speakers overall provided little new information.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1241 1.1302 1.1047 2.26%
GBP/USD 1.3069 1.3298 1.2785 3.86%
EUR/USD 1.1626 1.1815 1.1526 2.45%
GBP/AUD 1.8116 1.8401 1.7781 3.37%
GBP/NZD 1.9782 2.0031 1.9435 2.98%
GBP/CAD 1.7027 1.7190 1.6796 2.29%

Today's Market Highlights

Highlights today as September and Q3 draw to a close include the final estimate of Q2 GDP in the UK (09:30 BST), expected to confirm growth of 0.4% quarter-on-quarter and 1.3% year-on-year. Sterling could see some modest support on the release, but unrevised figures may have an overall limited impact.
 
The euro has been softer this morning after Italy agreed a budget as markets express caution about the implications for Italy’s debt, currently the second highest in the Eurozone as a percentage of GDP. Preliminary September Eurozone inflation figures (10:00) are projected to show that both headline and inflation ticked back up to July levels—2.1% for headline CPI and 1.1% for core CPI. An acceleration in underlying inflation will be needed to shift rate hike expectations forward from the second half of next year.  
 
Mixed but broadly positive US data could support the dollar in the afternoon session (13:30). The Canadian dollar could strengthen on a slight pick-up in monthly GDP to 0.1% (13:30).

Today's Economic Calendar

Time Currency Release Consensus Previous
9:30am GBP GDP QoQ (Q2) 0.4% 0.4%
9:30am GBP GDP YoY (Q2) 1.3% 1.3%
9:30am GBP Total Business Investment YoY (Q2) 0.8% 0.8%
9:30am GBP Current Account (Q2) £-19.40B £-17.72B
10:00am EUR CPI YoY (Sep) 2.1% 2.0%
10:00am EUR Core CPI YoY (Sep) 1.1% 1.0%
1:30pm USD Core PCE YoY (Aug) 2.0% 2.0%
1:30pm USD Personal Income MoM (Aug) 0.4% 0.3%
1:30pm USD Personal Spending (Aug) 0.3% 0.4%
1:30pm USD Fed Member Barkin Speaks
1:30pm CAD GDP MoM (Jul) 0.1% 0.0%
1:35pm EUR ECB's Praet Speaks
2:20pm GBP BoE's Ramsden Speaks
2:45pm USD Chicago Purchasing Managers' Index (Sep) 62.5 63.6

Caxton