With a thin economic calendar today, Sterling investors are focused on tomorrow’s GDP data from the UK. This report will be eyed to gauge the nation’s economic growth for the last quarter of 2014, especially amid recent signs of a slowdown in the UK economy. The data will also determine expectations about the trajectory of interest rates in the nation going forward.Meanwhile, in the Euro zone, the mostly upbeat German Ifo surveys released earlier today provided support to the Euro, especially after the victory of the leftist Syriza party in Greece caused the common currency to weaken initially against its counterparts. Across the Atlantic, Friday’s soft preliminary Markit manufacturing PMI report cast doubts about the resilience of the US economy to the subdued global conditions.
It was revealed today that retail sales in the UK grew more than expected for December. However, attention among investors is likely to remain focused on the BoE Chief’s speech today. Considering the dovish tone in the minutes of the most recent policy meeting and with new stimulus measures introduced in the Euro zone yesterday, his speech will be scrutinised to gauge the future course of monetary policy in the UK.The preliminary PMI reports released earlier today showed that the pace of manufacturing and services activity in the Euro zone improved for January. Across the Atlantic, investors eye the Markit flash manufacturing PMI readings later today to gauge the resilience of the economy to the current subdued global conditions.
Today’s UK data revealed that public sector borrowing in the nation widened unexpectedly for December. However, Sterling has shown little reaction to today’s data as investor sentiment remained subdued after a dovish tone in the minutes of the latest BoE policy meeting released yesterday weighed on expectations of any near term interest rate rise in the UK. Meanwhile, the ECB is scheduled to hold its policy meeting later today, where the central bank is expected to unleash a quantitative easing programme in the Euro zone, the size and duration of which is keenly awaited.Across the Atlantic, today’s weekly jobless claims survey will be eyed to gauge the nation’s labour market health.