With the Queen’s speech expected to mark the official commencement of British Parliament proceedings, focus will be on the incoming government’s plans with regards to membership of the EU. The revised GDP reading in Britain tomorrow is likely to indicate that growth at the start of the year was slightly better than initially estimated a month ago, reflecting stronger industrial and construction data for March.

In the Euro zone, GfK’s monthly survey indicated that morale among German consumers is set to improve again in June, helped by robust domestic demand. Later in the day, the US economy moves to the fore again with MBA mortgage applications and the Redbook sales index in focus.

Pound Sterling – UK Markets

The Pound has held steady versus the euro, but continues to lose ground against the US dollar this morning. With hardly any significant domestic data in the macroeconomic calendar today, market participants look forward to the release of the second estimate of UK’s first quarter GDP data, scheduled for release tomorrow. The initial reading had shown that the UK economy expanded 0.3% in the first quarter, representing a slowdown from the 0.6% rise in GDP posted for the final three months of last year. Traders expect a slight pickup in the revised reading. A surprise in the growth data could significantly influence trading in Sterling against its major currency counterparts and also provide direction to interest rate expectations. Additionally, reports on total business investment, government spending and GfK consumer confidence index are also due for release tomorrow. Yesterday, the CBI’s distributive trade survey indicated that the volume of retail sales and orders exceeded market expectations for May, as low inflation has provided a boost to household income and encouraged spending in the nation.

US Dollar – US Markets

The US Dollar traded on a stronger footing against the Euro yesterday, following a batch of better than expected US macro releases that signalled a rebound in US growth momentum. The durable goods orders, excluding transportation, in the US topped market expectations while the headline figures eased, largely driven by a fall in commercial aircraft orders for April. Additionally, sentiment about the health of the US housing sector has improved after sales of newly built homes surpassed market expectations for April. The data has added to evidence that the improved job market, historically low interest rates and rising rental costs have boosted the real estate sector in the US. Also, home prices in the US rose at a steady pace for March, due to supply constraints in the market. Separately, the Conference Board’s consumer confidence index ticked higher for May, indicating an improvement in economic growth outlook.

The US Dollar continues its strength against the major currencies this morning, amid an absence of significant macroeconomic releases in the US today.

Euro – European Markets

The Euro recouped some of its losses and moved above the 1.09 mark against the US Dollar this morning after GfK’s sentiment indicator for June showed that consumer confidence in Germany has improved to the strongest level since October 2001. The data indicated that the soft pace of economic growth in the first quarter GDP data and persistent geopolitical uncertainty has failed to deter confidence among consumers. On the flip side, France’s consumer confidence figures came in unexpectedly lower for May. With no further economic data in the Euro zone, investors will now eye consumer confidence and economic sentiment indicators in the Euro area tomorrow, for additional cues.

While the ongoing debt talks between the Greek government and its international creditors continues to weigh on sentiment, the Greek Finance Minister, Yanis Varoufakis, yesterday tried to downplay concerns by expressing confidence that Greece will reach a deal with its creditors in time to avoid defaulting the payment of IMF’s loan installment, due early next month.

Other Currencies – Highlights

The Canadian Dollar is currently trading higher against the US Dollar, ahead of Bank of Canada’s (BoC) announcement of its interest rate decision today. The central bank is widely expected to keep its monetary policy unchanged after the BoC Governor, Stephen Poloz, last week, in a speech, stuck to his bullish tone that the Canadian economy is recovering led by a robust rebound in exports. The central bank’s policy statement later today is expected to express similar optimism. Following today’s rate decision, investor focus will shift to Canada’s GDP reading for March, scheduled later this week, to gauge the nation’s performance in the end of the first quarter. The central bank had last month forecasted no growth in the first quarter, with the steep slump in energy prices having weighed on activity during early 2015.

Going forward, the second estimate of first quarter GDP data in the US due on Friday is likely to attract significant market attention. Both the Canadian and the US GDP data releases are scheduled on the same day.