GBP slips as UK production dips. Market primed for todays Fed minutes
09/Jul/2014 • Currency Updates•
London closed with Sterling flat against the Dollar and dipping slightly against the Euro.
The morning saw most activity with UK Industrial and Manufacturing figures surprising to the downside. Industrial production for May came in at 2.1% against the called 3.1%, Manufacturing Production also dipped to 1.3% against the 0.4% called. A slight Sterling sell off across the board ensued however major supports remained and Sterling mostly scuttled back up across the board. A monthly dip does not make a trend and the market mostly shrugged off the news.
GDP estimates painted a rosy picture, the UK remains on point to score 0.9% growth for Q2, the market expects GDP growth of around 3% for 2014 which looks realistic, this would put the UK as the fastest growing major world economy for the year.
London closed with the Euro ticking up a little against both the Dollar and Sterling. Finally some good news for Europe as German goal exports to South America hit all time highs which came as real shock for Brazil who clearly didn’t Merkel the German strikers.
Prior to kickoff the Euro took leverage from the poor UK industrial and manufacturing figures to rally against the pound, we also saw a push against the dollar as momentum faded on last weeks rally following the strong NFP print. German Trade balance figures were positive although the French figures were again disappointing. The Euro price was barely affected and the Euro remains fairly well supported across the board.
No data of note out today.
London closed with the dollar dipping a touch against the Euro but scuttling up against the pound following poor UK data. the US Redbook index and business optimism survey both saw uplift from last month, further signs that the economy is improving.
Big day for the greenback and US markets today- heads will again turn to the highly anticipated release of the Fed minutes. The US has been improving in recent months after a harsh winter, this view was reinforced last week with the strong NFP print. The improvement fuels speculation on the likely action of the Fed. Will Yellen be more hawkish and change the pace and timing of QE? Who knows, but as ever the minutes should give a little more clarity and markets will respond accordingly. More than anything Fed watchers will be keeping a stethoscope on the retort and tone of the meeting, it’s widely expected that the Fed will keep things much the same for now.
Fed minutes set for release 7.00 BST