Exchange rates for the higher yielding currencies are tailing off this morning ahead of a big day for US markets, with GDP figures and consumer confidence due. German growth figures are also out this morning, to be followed by UK statistics tomorrow and this could lead to a volatile few days for the major currencies.

Pound Sterling – UK Markets

Sterling exchange rates are mixed this morning ahead of US GDP figures due later in the day. The pound is currently lower against the greenback valued at 1.65 and slightly down against the euro at 1.10.

Sterling finished last week at low levels after dovish comments from the Bank of England dampened positive inflation figures in the UK, and remains under pressure this week ahead of GDP figures on Wednesday. Today the pound is likely to be influenced by data coming out of the US, with only BBA mortgage approval figures and business investment data due today.

US Dollar – US Markets

Currency rates for the US dollar are stronger this morning against all its major currency partners with the exception of the Japanese yen. The dollar is currently trading in the region of 0.66 against the euro and 0.6 against the pound.

Sales of previously owned homes in the US have jumped 10.1% in October, fuelled by a reduction in tax credits which has helped to simulate the property sector. This has helped buoy equities, with the Dow Jones finishing up 1.3% on Monday and boosted exchange rates for the higher yielding currencies. GDP figures, consumer confidence and minutes from the FOMC meeting are due today and this will certainly induce some currency volatility.

Euro – European Markets

Exchange rates for the single currency have been tailing off this morning ahead of a busy day for US markets. The euro is currently slightly higher against the pound, Aussie and Kiwi currencies while falling against the US dollar and yen.

The German purchasing manager index surprised markets to the upside yesterday, coming in with a positive reading of 52 in October. This was slightly ahead of the eurozone reading of 51, but shows the region is on track to recovery. German GDP figures and business confidence are due today, with confidence expected to rise to a 14-month high as the recovery gathers momentum.

Other Currencies – Highlights

The Canadian currency has climbed to its highest level in two weeks against the US dollar as gold and equity markets rise, appreciating 1.4% to the region of 1.05, up from 1.07 last week. Canadian banks are expected to report profits for the first time in two years from their equity and trading divisions, as increased market stability is driving profit margins. Canadian retail sales also rose 1% in October, though appetite for the loonie today will likely be driven by the results of US GDP figures.