Today’s domestic macro data has revealed that mortgage approvals fell for a fourth consecutive month during September along with a drop in the nation’s consumer credit demand. However, the Pound has shown little reaction this morning and is trading above the 1.61 mark against the US Dollar, partly supported by yesterday’s weak US durable goods orders data. However, it remains to be seen if Britain maintains the growth momentum during the fourth quarter amid signs of some fatigue in consumer-led growth.

With the US Fed poised to end its bond buying programme this month, the post-meeting policy statement later today will be keenly eyed to gauge if the central bank offers any hints over the timing of an interest rate rise in the nation.

Pound Sterling – UK Markets

Data just out has indicated that the number of mortgage approvals in the UK dropped for a fourth consecutive month during September, in response to the measures taken by the BoE to tackle a potential housing bubble in the nation earlier this year. Separately, another report revealed that consumer credit in Britain fell for September, although less than expected. In the light of yesterday’s comments by the BoE Deputy Governor, Jon Cunliffe, where he raised concerns about muted earnings growth and low inflation in the nation, today’s data has heightened fears about affordability in the nation. However, the Pound has shown little reaction to today’s domestic macro data and continues to trade in a tight range against the greenback this morning ahead of the crucial US Fed policy decision due later today. Going forward, traders will keep a tab on the GfK report scheduled later this week to verify if consumer morale in Britain weakens further for October.

In yesterday’s trading session, Sterling recovered from its initial weakness and moved above the 1.61 mark against the greenback following downbeat durable goods orders data in the US.

US Dollar – US Markets

The greenback is trading in a tight range against the majors this morning ahead of today’s FOMC monetary policy announcement where the central bank is likely to announce an end to its bond buying programme. Additionally, traders will scrutinise the policy statement to gauge the timing of an interest rate rise in the US. It remains to be seen if the Fed alters its view about the labour market and expresses concerns about the state of the global economy. Moreover, tomorrow’s preliminary GDP reading in the US for the third quarter is likely to attract considerable market attention as it will help investors to reassess their view on the nation’s economy following a sharp rebound in economic growth during the second quarter.

Yesterday, the US Dollar lost ground against the majors after data showed an unexpected drop in US durable goods orders for September. This probably hints at signs of reluctance among firms to spend more amid subdued global economic conditions. However, losses in the greenback were capped after another report revealed that consumer confidence in the US reached its highest level since October 2007.

Euro – European Markets

During the course of yesterday’s trading session, the Euro convincingly breached the 1.27 mark against the US Dollar following weaker than expected durable goods orders data in the US. However, the Euro has limited its gains and is trading in a tight range against the majors this morning ahead of tomorrow’s crucial German consumer price inflation data which is widely expected to show an acceleration for October. The recent mixed reports in Germany have kept market participants confused about the macro trend in Europe’s largest economy.

Meanwhile, data released earlier today revealed that confidence among consumers in France deteriorated for October. This has stoked worries among investors, especially after last week’s Markit survey which showed that both manufacturing and services sector contracted more than expected in Europe’s second largest economy for October. With no other domestic macro releases scheduled today, traders will keep a tab on the US Fed’s post-meeting policy statement later today to ascertain if the world’s largest economy ends its bond buying programme this month.

Other Currencies – Highlights

The Kiwi Dollar gained ground against the greenback and crossed the 0.79 mark in yesterday’s trading session after data released in the US showed that durable goods orders dropped unexpectedly for September. Additionally, the New Zealand Dollar gained support after the ANZ report released overnight revealed that morale among firms in New Zealand improved during October. Although the report revealed that confidence across the nation’s agriculture sector including the crucial dairy industry remained subdued, firms remained optimistic about future business activity.

Going forward, market participants will keep a tab on the Reserve Bank of New Zealand’s interest rate decision due later today where the central bank is expected to keep its key interest rate unchanged at current levels. Furthermore, with the US FOMC meeting also scheduled today, the New Zealand Dollar-US Dollar pair is likely to witness some volatility in the latter half of the trading session.