With the Christmas holiday period fast approaching and a light global macro calendar today, investors in currency markets are likely to remain on the sidelines. Going forward, market participants will eye the final GDP reading in the UK scheduled tomorrow to confirm if the nation’s economic growth remained strong for the third quarter.In the Euro zone, data scheduled later today is anticipated to show an improvement in morale among consumers in the region. Considering the recent upbeat trend in German and Euro zone economic data, any improvement in the region’s confidence is likely to further ease worries among investors. Across the Atlantic, tomorrow’s revised GDP data is expected to show an upward revision for the third quarter.
Today’s public sector borrowing report for November revealed that government debt in the UK continued to rise, weakening hopes that the British Chancellor might be able to reach his deficit reduction targets this fiscal year. The report provided little relief to Sterling investors after the GfK survey released earlier today indicated that morale among consumers in the UK weakened surprisingly for December.Across the Atlantic, market participants are likely to keep a tab on speeches by Fed officials, Jeffrey Lacker and Charles Evans, later today to get more clarity on the US Fed’s policy guidance going forward, especially after it dropped the “considerable time” phrase from its post-meeting policy statement.
Today’s data has shown an improvement in Britain’s retail sales for November. This has strengthened market speculation that domestic spending is improving, especially after yesterday’s labour market report showed that wage growth grew at a stronger than expected pace. Against this backdrop, traders will eye tomorrow’s GfK survey to better understand consumer morale in the UK for the fourth quarter.Across the Atlantic, the US Dollar moved sharply higher yesterday after the Fed dropped the “considerable time” language from its policy statement and provided an encouraging assessment of the economy. Traders will now eye economic data in the US going forward to verify if the Fed remains on its path to raise the key interest rate next year.