Sterling Sentiment Returns On GDP

Yesterday was a data heavy day across the major economies with key releases from the UK and the US throughout the day. We saw the pound start on the back foot as markets opened at 8am as traders digested better than expected German import price index figures, giving the euro some positive news ahead of the UK GDP and business investment figures released at 9.30am.

The figures came out as expected, showing 3 percent growth YoY and 0.7 percent QoQ. The index of services posted slightly better than forecast, while business investment came in much lower by some 3 percent. Being a low key release markets didn’t seem to pay much attention as we saw sterling increase across the board, notably gaining half a cent from the euro, a cent from the greenback, 1.5 cents against the Kiwi dollar and 2 cents from the Aussie! The latter meant anyone sending money to Australia for that dream emigration was £3000 better off on buying A$500,000.

The afternoon threw up a range of ecostats from across the pond, including durable goods, jobless claims, personal income and personal consumption expenditure. These were followed later by Chicago PMI, the Reuters consumer sentiment index, new home sales, pending home sales and oil/gas stocks change. Most of these releases missed their expectations adding fuel to the pounds run of form and sending the dollar down nearly a cent against the euro.

With Thanksgiving Day today the world’s major economy enjoys a day off, which could leave the greenback open to further selling. Elsewhere we have German unemployment data which is a key release and could, if positive, claw back the losses from yesterday. This is followed up by EU money supply, private loans, consumer confidence and business climate figures to name a few and rounded off with German inflation figures at lunchtime.

So it’s a day led by “ze Germans” with no releases elsewhere to speak of. Anyone looking to buy euros may be prudent to get in early just in case the data provides us with a volatile day ahead. Contact one of the CI team to discuss your requirements.