Previous Day's Market Highlights
Sterling rallied above 1.3000 against the dollar yesterday for the first time in five weeks, more than reversing its post-election losses. Sterling-dollar hit a high around 1.3048 in May.
The dollar has been weaker recently as data, particularly inflation figures, take a softer turn, and as concerns rise about the ease with which Trump will be able to pass key tax measures given recent political drama. The pound rallied sharply on Wednesday as BoE Governor Carney hinted that a rate hike in the UK could come sooner than previously expected.
Euro-dollar made further gains, meeting resistance around 1.1445, the rate’s highest levels since May 2016. The rate has primarily traded within a range of 1.0500 to 1.1500 since 2015, breaking above 1.1600 in August 2015 and May 2016.
US Q1 GDP was revised up from 1.2% to 1.4%, but the release had limited impact on the dollar against either the pound or the euro.
Sterling traded relatively sideways against the Australian and Canadian dollars and made some further headway against the New Zealand dollar, but failed to break 1.7900.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
|GBP / EUR||1.1384||1.1572||1.1261||2.69%|
|GBP / USD||1.3005||1.3031||1.2589||3.39%|
|EUR / USD||1.1423||1.1446||1.1119||2.86%|
|GBP / NZD||1.7773||1.8254||1.7338||5.02%|
|GBP / CAD||1.6890||1.7536||1.6721||4.64%|
Today's Market Highlights
This morning, the UK releases final estimates of Q1 GDP, expected to remain unrevised at 0.2% quarter on quarter (09:30 BST). Q1 Business Investment is also forecast to be unrevised. The releases may have limited impact barring any significant revision.
Annual Eurozone CPI is forecast to slow to 1.2% from 1.4%, which may weigh on the euro as markets speculate when the ECB will next reduce QE.
In the afternoon, attention will largely be on US Personal Consumption Expenditures (13:30 BST), an indicator of inflation. Inflation has recently been softer in the US, which if sustained may have implications for a third rate hike this year. According to the CME FedWatch Tool, markets are currently pricing in a 54.4% chance of a December hike.
Other releases to keep an eye on include monthly Canadian GDP (13:30 BST), the Chicago Purchasing Managers’ Index and Michigan Consumer Sentiment Index (14:45, 15:00 BST).
Today's Economic Calendar
|09:30||GBP||GDP YoY (Q1)||2.0%||2.0%|
|09:30||GBP||GDP QoQ (Q1)||0.2%||0.2%|
|09:30||GBP||Total Business Investment QoQ (Q1)||0.6%||0.6%|
|09:30||GBP||Total Business Investment YoY (Q1)||0.8%|
|09:30||GBP||Current Account (Q1)||£-17.250B||£-12.088B|
|10:00||EUR||Preliminary CPI YoY (Jun)||1.2%||1.4%|
|10:00||EUR||Preliminary Core CPI YoY (Jun)||1.0%||0.9%|
|13:30||USD||Core Personal Consumption Expenditures - Price Index YoY (May)||1.4%||1.5%|
|13:30||USD||Personal Consumption Expenditures - Price Index YoY (May)||1.5%||1.7%|
|13:30||CAD||GDP MoM (Apr)||0.2%||0.5%|
|14:45||USD||Chicago Purcashing Managers' Index (Jun)||58.0||59.4|
|15:00||USD||Michigan Consumer Sentiment (Jun)||94.5||94.5|
|15:30||CAD||Bank of Canada Business Outlook Survey|