Nationwide has reported that house prices in the UK continued to grow for October, albeit at a slower pace, compared with same period previous year. However, the Pound has continued to trade under pressure against the majors, largely hurt by yesterday’s US Fed monetary policy decision. Additionally, the recent dovish comments from BoE officials has strengthened prospects of a delay in the timing of an interest rate rise in the nation.

Across the Atlantic, the flash estimate of the third quarter GDP reading due later today will be an important event. In Germany, today’s preliminary reading of consumer price inflation is expected to show an acceleration, thereby easing concerns over a deflationary threat in the Euro zone.

Pound Sterling – UK Markets

The Nationwide report released in the UK earlier today showed that house prices increased more than anticipated for October. However, this was the second straight month which recorded a slowdown in annual growth of house prices. This is in line with the declining trend in the number of mortgage approvals in the UK and can be attributed to the BoE’s tough lending measures introduced earlier this year. Going forward, with no other important macro events in Britain today, market participants will keep a tab on the preliminary GDP reading in the US and inflation data in Germany for further direction to risk appetite. Additionally, tomorrow’s GfK consumer confidence report in the UK will attract market attention which is expected to show that sentiment among consumers deteriorated for October.

The Pound is trading on a weaker footing against the greenback and has slipped below the 1.60 mark this morning. This is an extension to yesterday’s Sterling losses against the US Dollar following the release of the broadly hawkish policy statement from the US Fed.

US Dollar – US Markets

The release of the preliminary GDP report will be an important macro event in the US today. The report is anticipated to show that the nation’s economic growth slowed for the third quarter after a strong performance for the second quarter. Traders will keep a tab on today’s GDP reading to verify if strong business investments and exports keep the nation’s economic growth supported.

The greenback gained ground against the majors in yesterday’s trading session following the US Fed’s monetary policy statement wherein the central bank announced an end to its bond buying programme. Additionally, the Fed indicated that the US labour market is gradually improving and downplayed risks of lower inflation. However, on expected lines, the Fed reaffirmed that interest rates are expected to remain low for a considerable period. Market participants considered the tone of the statement to be largely hawkish and they will now keep a tab on today’s speech by the US Fed Chief, Janet Yellen, for hints on the timing of an interest rate rise in the US.

Euro – European Markets

Data released earlier today revealed that the number of unemployed people in Germany unexpectedly dropped for October and the nation’s unemployment rate remained unchanged at 6.7%, in line with market estimates. Moving ahead, investors will keep an eye on the preliminary consumer price inflation reading Germany due later today which is expected to register an acceleration for October. This is likely to pacify concerns among investors, especially amid signs of a deflationary threat surrounding the Euro zone. Additionally, traders will keep a tab on various sentiment surveys in the Euro bloc for October which is expected to show an improvement in consumer morale and a fifth consecutive monthly deterioration in the business climate index. However, the ECB's bank lending survey released yesterday indicated that banks in the Euro zone had eased their credit standards on loans to firms and households which is likely to improve the region’s business conditions going forward.

The Euro was under pressure against the greenback yesterday and dropped below the 1.26 mark following the US Fed’s monetary policy decision.

Other Currencies – Highlights

The Canadian Dollar weakened sharply against the greenback in yesterday’s trading session following the release of the US Fed’s policy statement which revealed an end to the central bank’s bond buying programme. Additionally, data released yesterday showed that prices of industrial products and raw materials in Canada dropped more than expected for September. Moreover, the Bank of Canada Governor, Stephen Poloz, indicated that if crude oil prices stay at lower levels for a prolonged period, the nation’s GDP for 2015 is likely to get adversely affected.

With little on the domestic macroeconomic front today, the Canadian Dollar is expected to track overseas cues for further direction. Market participants will keep a tab on the first estimate of the US third quarter GDP reading scheduled later today which could result in some volatility in the US Dollar-Canadian Dollar pair.