UK Growth Domestic Product prints this morning - we wait to see if the economy will surpass its previous 1.9%. GDP is fundamental in determining the measure of the total value of goods and services produced in the UK and usually plays a vital role in controlling the strength of Sterling.
However, UK GDP has been in a bearish trend since June 2015, dropping by 1.0%. Additionally, Bank of England (BoE) Governor Carney also mentioned that despite the fact that a rate hike is probably going to be the next move by the policy makers, the timeline has been widened to “sometime in the next three years.” Consequently, a positive GDP print today is likely to be overlooked, especially when you consider that current Brexit fears are also likely to curb any rally from the Pound.
GBPUSD opened at 1.40057 yesterday and the Pound sell off continued as Cable fell to its lowest level in seven years before finding support at 1.3878. The pair did stage a small comeback following the poor US data, which showed the US Markit flash PMI services-sector report falling to its lowest level for 27 months, with a reading of 49.8 vs expectations of 53.5. New home sales also declined by 9.2% to an annualized 494k, against an expected fall of just 4.4%. GBPUSD opened this morning slightly higher at 1.3929.
EURUSD opened yesterday at 1.1019. The Dollar showed some strength against the single currency in the morning session but then relinquished some of those gains following the weak US data. Another bumpy day for the Euro looks likely today ahead of the Eurozone final CPI data. Core year-on-year data is predicted at 1%, anything below that and there will be probable Euro weakness and more pressure on the European Central Bank (ECB) to change policy in March.
Data to watch: 9.30am UK GDP (YoY & QoQ)(Q4). 10am Eur CPI (YoY & MoM). 1.30pm US Durable Good Orders.
Posted in Daily Market News on Feb 25 2016
It was a day of mixed outcomes for the Dollar against its major pairs yesterday as we saw it up against Sterling amidst fears of a Brexit, but down against the Swiss Franc as economic data coming out of Europe was mixed.VIEW FULL ARTICLE
Posted in Daily Market News on Feb 24 2016 by William Kemp and the Sales Team