Pound awaits GDP data
24 April, 2013
Sterling has remained in narrow ranges against most currencies, as markets await the release of first quarter GDP tomorrow morning. While the UK economy is not widely expected to have fallen back into a third recession, it is likely to be a close run thing, and if we do have a negative growth figure then sterling is likely to suffer badly.
Recent data has been mixed, with retail sales and unemployment worse than expected, but manufacturing looking better. This morning’s mortgage approvals, at 9.30am, will give us another clue as to the direction of the economy and therefore the Pound.
In Germany this morning, economic sentiment surveys were worse than expected, with Germany perhaps starting to feel the pinch of problems around the Eurozone. The Euro has remained weaker (cheaper) since the Cyprus bailout crisis, which shows that all is still not well in the single currency zone. There are German and Italian bond auctions later today which could push the Euro lower, and anyone with a requirement to buy Euros should consider looking at rates today before the GDP announcement tomorrow.
We also have durable goods orders in the USA at 1330 today, and the next Bank of England governor, Mark Carney, speaking this evening in his current role as governor of the Bank of Canada. Rates for sending money to Canada, as well as buying AUD and ZAR, are currently at near term highs.
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