UK GDP Reading Unchanged
The second estimate of the UK GDP data showed that economic growth in the nation was unchanged for the third quarter despite business investments and exports remaining under pressure. Meanwhile, the BoE Governor resorted to a dovish stance yesterday in his testimony before the Treasury Select Committee. He warned that Britain’s interest rate is expected to rise at a slower pace next year amid external challenges and prospects of weak inflation in the UK going forward.
Across the Atlantic, traders will eye a raft of economic data scheduled later today ahead of tomorrow’s Thanksgiving Day holiday in the US. Durable goods orders and jobless claims data will attract maximum market attention, especially after yesterday’s mixed economic data in the world’s largest economy.
Pound Sterling – UK Markets
The revised GDP data just out has shown that the pace of economic growth in the UK matched the preliminary estimate for the third quarter of 2014. The report further revealed that growth in domestic business investment eased during the quarter and exports from the UK declined amid weak demand from the Euro zone. The Pound has shown a knee jerk reaction and moved marginally lower against its major peers following the release of today’s GDP data. With durable goods orders and initial jobless claims data scheduled in the US later today, investors in the Pound-US Dollar pair are likely to remain on their toes.
In yesterday’s trading session, the Pound moved higher against the US Dollar and was range bound against the Euro. Meanwhile, the BoE Governor, Mark Carney, indicated that the central bank is likely to raise its key interest rate at a slower pace next year as the economy requires more support from monetary stimulus measures. Furthermore, he hinted that policymakers remained concerned amid a slowdown in the Euro zone and prospects of UK inflation falling below 1%.
US Dollar – US Markets
The greenback is trading in a tight range against its key peers this morning ahead of US durable goods orders data later today which is anticipated to show that orders declined at a slower pace for October. Additionally, traders will keep a tab on today’s weekly jobless claims data in the US which is expected to show that the number of first time jobless claimants remained below the 300K mark for a twelfth straight week.
In yesterday’s trading session, the greenback lost ground against the majors following the release of mixed economic data in the US. The GDP report showed that economic growth in the US was revised upwards for the third quarter, mainly led by strong growth in consumer spending and business investments and higher inventories across companies. However, the US Dollar slipped against its peers after the Conference Board’s report released yesterday showed that morale among consumers in the US deteriorated unexpectedly for November ahead of the upcoming holiday shopping season in the nation. The report further revealed that consumers were pessimistic about current conditions as well as the near term outlook for the US economy.
Euro – European Markets
The common currency gained ground against the majors in yesterday’s trading session. The revised German GDP data confirmed that the nation avoided a recession for the third quarter. Separately, the Organisation for Economic Co-operation and Development, in its latest economic outlook report, indicated that global economic growth is likely to remain modest over the next two years. The report further expressed concerns about the lingering deflation threat in the Euro zone and urged the ECB to resort to further stimulus measures. Against this backdrop, market participants will keep a tab on the ECB policy meeting scheduled next week.
With no crucial macro triggers scheduled in the Euro zone today, the Euro is trading in a tight range against its major counterparts this morning. Going forward, German labour and preliminary consumer price inflation data for November will be some key economic releases tomorrow. This will help traders to get a broader insight into the nation’s macro health, particularly after manufacturing and services PMI readings in Germany eased unexpectedly this month.
Other Currencies – Highlights
The Kiwi Dollar lost ground against the greenback in yesterday’s trading session following the release of downbeat consumer price inflation expectations for the fourth quarter. The report revealed that the Reserve Bank of New Zealand lowered its medium term inflation forecast for a third consecutive quarter. Market participants are expected to keep an eye on next month’s monetary policy meeting of the RBNZ, especially after inflation expectations and dairy prices have been softening in New Zealand lately. However, losses in the New Zealand Dollar were capped in the latter half of yesterday’s trading session after data showed that morale among consumers in the US deteriorated for November.
Going forward, traders will eye today’s trade data in New Zealand which is anticipated to show that the nation’s trade deficit narrowed for October. Additionally, with durable goods orders and initial jobless claimants data scheduled in the US later today, the Kiwi Dollar is expected to witness some volatility against the majors.