Today is another relatively quiet economic calendar day in the UK, with the only focus being the Halifax house price data. Data showed that British house price inflation advanced more than expected in May. However, on an annual basis, house prices held steady at a six-month low level in May. In the Euro zone, German industrial production posted a stronger than expected rise for the month of April. Next up in the region, the revised first quarter GDP figure for the Euro zone will be released in some time and is expected to confirm its preliminary growth rate.

Across the Atlantic, the US economic calendar also remains fairly light today, with a couple of second tier data due on the cards, such as the economic optimism, consumer credit, and unit labour costs reports.

Pound Sterling – UK Markets

The Pound has extended its previous session gains against the US Dollar and the Euro this morning after the latest European Union referendum poll showed a one-point lead for the “Remain” campaign. With the recent polls indicating a very tight race, the next couple of weeks could become extremely volatile for the Pound. Data released earlier in the session showed that Britain’s Halifax house price indicator posted a strong turnaround in the May report. Tomorrow will be a significant day for economic releases in the UK, with the nation’s industrial production, manufacturing production, and the latest NIESR GDP estimate scheduled.

Yesterday, Sterling gained ground against the greenback amid a broad-based weakness in the US Dollar after the US Federal Reserve (Fed) Chairwoman, Janet Yellen, stopped short of providing a timeline for the central bank’s next interest rate rise. On the data front, a report published by the British Retail Consortium showed that retail sales in the UK rebounded above expectations in May, mainly led by sales growth in the clothing and footwear categories.

US Dollar – US Markets

The US Dollar weakened against most of its major peers yesterday after the US Fed Chairwoman, Janet Yellen failed to set a specific timetable for the central bank’s next interest rate increase. This was in stark contrast to her stance last month, wherein she indicated that an interest rate rise would be appropriate in the coming months. In her latest appearance, the Fed Chairwoman remained upbeat about the overall US economic outlook and cautioned against placing too much significance on one weak economic report, last month’s US nonfarm payrolls report to be precise, and assured that the nation’s positive economic forces will overshadow the negatives to achieve the nation’s employment and inflation objectives. On the data front, the US labour market conditions index dropped for the fifth consecutive month to its weakest level since May 2009, reinforcing the perception of slowing jobs growth in the nation.

Moving ahead, investors will look forward to the US IBD/TIPP economic optimism index for June and consumer credit report for April, due later in the day.

Euro – European Markets

The shared currency is trading on a strong footing against the US Dollar this morning after German industrial output rebounded more than expected in April, mainly led by a rise in the production of investment goods. The report comes a day after data showed that the nation’s factory orders dropped the most in nine months in April as exports slumped. In other economic news, French trade deficit surprisingly widened in April, as shipments from the aerospace and metal industry experienced a slowdown. Additionally, the nation’s current account deficit expanded as well in April. On the other hand, Spain’s industrial output advanced above expectations in April. Moving ahead, investors now await the Euro zone’s final GDP data for the first quarter and is expected to come in unchanged from the previous numbers.

Yesterday, the Euro found renewed strength against the greenback after the US Fed Chairwoman refrained from providing any hints over the specific timing for the Fed’s next interest rate action. On the data front, the Euro zone Sentix Investor Confidence Index registered a higher than expected reading in June.

Other Currencies – Highlights

The Canadian Dollar has extended its previous session gains this morning. Looking ahead, market participants await the release of Canada’s Ivey PMI data for May, which is expected to post a slight dip. Further ahead, investors will witness a slew of important economic data points from Canada this week. Next up for release will be the nation’s housing starts, building permits, and the new housing price index data, along with the Bank of Canada’s (BoC) bi-annual financial system review report. Here, the central bank members will get a chance to elaborate their views on the economy and the wildfires in the oil producing region of Alberta is definitely expected to be a part of this discussion. It will then be followed by a press conference hosted by the BoC Governor, Stephen Poloz. Closing this week will be the May unemployment rate and employment change outcome report.

Earlier in the session, the Canadian Dollar strengthened against its US counterpart, buoyed by a rise in oil prices and amid a broad-based weakness in the greenback.