Yesterday, a downside surprise in UK’s final GDP data for the third quarter along with a downward revision to Britain’s economic growth for the past few quarters stoked concerns among Sterling investors over the possibilities of a delay in the timing of an interest rate rise in the nation. However, in the absence of any notable economic releases today and the prevalent holiday mood in markets, major currency pairs are unlikely to witness any significant volatility in the week ahead.

Across the Atlantic, yesterday’s stronger than expected upward revision to the US GDP numbers for the third quarter supported the greenback against the majors. Going forward today, the weekly jobless claims report will attract market attention to gain an insight into the labour market.

Pound Sterling – UK Markets

The Pound lost ground against the greenback in yesterday’s trading session following the release of final GDP data in the UK which showed an unexpected downward revision to the nation’s annual economic growth for the third quarter. The report further revealed that current account deficit in the UK widened unexpectedly and growth in Britain’s total business investments slowed for the third quarter. The downbeat GDP reading along with the latest signs of softness in the nation’s inflation health has heightened fears among investors that Britain’s economic health might be deteriorating, as it continues to face headwinds from a slowdown in Europe. Additionally, a downward revision to Britain’s GDP figures for the past few quarters along with a stronger than expected upward revision to the US GDP data further weighed on Sterling-US Dollar pair.

With a light domestic macro calendar today, Sterling investors will eye the weekly jobless claims report in the US due later today for further direction. Additionally, with festive holidays in the week ahead, Sterling is unlikely to witness major volatility against its key peers this week.

US Dollar – US Markets

In yesterday’s trading session, the greenback gained ground against its major peers following the release of final US GDP data which revealed that economic growth for the third quarter was revised upwards to register its strongest pace in eleven years. An upward revision to the GDP reading was mainly led by robust consumer and business spending levels in the US. Amid signs of strength in the nation’s economic activity, market optimism continued to build up that the US Fed might be inclined to consider a sooner than expected interest rate rise next year. Meanwhile, another report indicated that durable goods orders in the US dropped unexpectedly for November.

The US Dollar is trading in a tight range against the majors this morning. Investors in the greenback will keenly eye the US weekly jobless claims survey scheduled later today to ascertain if yesterday’s encouraging Reuters/Michigan consumer confidence numbers remained buoyed by the nation’s labour market strength for December.

Euro – European Markets

The Euro gained ground against the Pound yesterday following the release of downbeat revised GDP data in the UK. However, the brief gains in the Euro-Sterling pair were pared in the latter half of the trading session, especially after the second round of voting in Greece’s parliament failed to elect a President. The ruling party of Greece was unsuccessful in securing majority votes in the parliament, despite recent calls by the nation’s Prime Minister, Antonis Samaras, where he offered the pro-European independent candidates to join the party. Market participants will now look forward to the third round of the Presidential election scheduled next week, especially amid prospects of snap elections in the nation which might result into the transfer of power to the Euro-sceptic opposition party in Greece.

The Euro is trading in a tight range against the majors this morning, in the absence of important domestic economic updates. With a light macro calendar in the week ahead due to festive holidays, investors’ focus is likely to remain on next week’s German retail sales and Euro zone revised manufacturing PMI numbers for further direction.

Other Currencies – Highlights

The Canadian Dollar briefly lost ground against the greenback yesterday after a stronger than anticipated upward revision to the US GDP data resulted in a knee jerk reaction in favour of the US Dollar. However, losses in the Canadian Dollar were pared later in the session as investors shifted back their focus on to Canada’s upbeat GDP report. Data showed that economic growth in Canada was better than expected for October due to an unexpected improvement in the nation’s manufacturing and oil-sands production sectors. However, considering recent reports indicating that oil producers have curtailed capital spending plans for next year amid declining crude prices, investors in the Canadian Dollar are likely to remain concerned about the nation’s economic health going forward.

With little on the domestic macroeconomic front, the Canadian Dollar is likely to take direction from the weekly jobless claims update scheduled later today in the US for further direction to risk appetite.