Amid a light day in terms of economic releases, the Pound is trading in a tight range against the greenback this morning. With yesterday’s GDP showing that economic growth in the UK missed market estimates for the last quarter of 2014, Sterling traders will eye this week’s GfK survey to gauge the health of spending among UK consumers for January. In the Euro zone, today’s German GfK survey revealed that morale among consumers for February improved to its highest in thirteen years.

Across the Atlantic, the Fed’s policy meeting will attract considerable attention among market participants to gauge the timing of an interest rate rise in the US, especially after yesterday’s soft US durable goods orders data heightened concerns over the economy’s resilience to the current subdued global conditions.

Pound Sterling – UK Markets

Yesterday, the Pound gained ground against the greenback despite the preliminary UK GDP report showing a slower than expected economic expansion for 2014. The print indicated that growth across Britain’s key services sector remained buoyant, but a slowdown across construction, mining and energy segments weighed on the nation’s macro health. However, with the economy registering its fastest growth since 2007 and outpacing its Euro zone peers, Sterling investors expressed little concern over yesterday’s downbeat data. Going forward, market participants will keep a tab on the revised UK GDP report, to gauge if there is an upside surprise to the preliminary numbers.

With little on the domestic macroeconomic front today, traders will eye the US Fed’s policy statement later today for further direction to the Pound-US Dollar pair. Going forward, investors will eye Friday’s GfK survey which is anticipated to show that UK consumers’ morale improved for January. However, prospects of an upside surprise cannot be ruled out, especially considering the recent pick-up in domestic wage growth.

US Dollar – US Markets

The US Dollar is trading marginally higher against the majors this morning ahead of the US Fed’s policy meeting scheduled later today. Market participants will keep a tab on the post meeting statement to ascertain whether the Fed continues to fuel expectations for a mid-2015 interest rate rise in the US.

The greenback lost ground against the majors yesterday following the release of downbeat durable goods orders data in the US, which showed an unexpected drop for December. The decrease was mainly led by a fall in sales of civilian aircrafts. Additionally, this report revealed a surprising ease in orders for core capital goods, stoking fears that subdued global conditions, falls in global oil prices and an elevated US Dollar are adversely impacting US manufacturers. Against this backdrop, investors will keep a tab on this week’s preliminary GDP reading in the US, for any signs of a downside surprise. Meanwhile, another survey showed that domestic consumer confidence for January reached its highest level since August 2007, as consumers remained optimistic about the nation’s labour market and the near term growth outlook.

Euro – European Markets

February’s GfK report released earlier today revealed that morale among German consumers improved more than expected, to its highest level in thirteen years. With cheaper fuel costs leading to higher disposable income among consumers and a weak Euro boosting exports from the nation, consumers remained optimistic about Germany’s economic outlook. This was another sign of relief that macro troubles in Europe’s largest economy have bottomed out, especially after the recent Ifo and ZEW surveys revealed that confidence among domestic firms and investors has improved. Separately, another report showed that import price inflation dropped more than expected for December, especially considering the recent fall in global crude oil prices. Going forward, traders will eye tomorrow’s preliminary consumer price inflation data for January, amid lingering fears of the region’s economy spiralling deeper into deflation.

The common currency extended its previous session gains against the greenback yesterday and rose above the 1.13 mark, after markets shrugged off concerns over Syriza party’s victory in Greece.

Other Currencies – Highlights

The Aussie Dollar gained sharp ground against the greenback in today’s trading session. Data released earlier today showed that Australia’s consumer price inflation eased more than expected for the last quarter of 2014, led by a sharp fall in global crude oil prices. However, the RBA’s core inflation measure remained buoyed, especially amid a sharp increase in prices of domestic holiday travel and tobacco. With the core inflation rate remaining within the central bank’s 2%-3% target range, investors’ expectation weakened towards prospects of an interest rate cut in Australia.

With no crucial domestic economic releases scheduled later today, the Aussie Dollar will take direction from the US Fed’s policy meeting in the latter half of the trading session. Going forward, the preliminary GDP reading scheduled in the US later this week, will prove crucial for the Aussie Dollar-US Dollar pair.