UK Lending Growth Less Than Expected
Just out data has shown that net lending to UK consumers for December rose less than expected. However, the GfK survey released earlier today showed that optimism among consumers strengthened for January, as low oil prices kept domestic spending levels supported. With no other crucial economic triggers scheduled in the UK today, Sterling investors will eye events abroad for further direction.
Across the Atlantic, market participants will keep a tab on today’s preliminary GDP data in the US which is expected to show that growth in the world’s largest economy slowed. In the Euro zone, traders will eye the flash consumer price inflation reading later today to verify if deflationary trends are strengthening in the region, especially after yesterday’s German inflation data showed a more than expected fall.
Pound Sterling – UK Markets
Data just out has shown that consumers in the UK borrowed less than expected for December, despite the festive shopping season keeping local spending buoyed. The report further revealed that the number of mortgage approvals in the UK increased unexpectedly last month, despite the latest BBA survey indicating a slowdown in mortgage growth for house loans. With no major surprise in today’s data, the Pound has continued to trade in a tight range against the greenback this morning. A GfK survey released earlier today revealed that consumers’ morale in the UK improved more than expected for January, to reach its highest level in five months. Later today, the flash GDP report scheduled in the US is likely to keep investors in the Pound-US Dollar pair interested. Going forward, next week’s manufacturing and service PMI readings in the UK along with the BoE’s policy meeting will attract significant attention among Sterling investors.
In yesterday’s trading session, Sterling lost ground against the greenback in the latter half and fell below the 1.51 mark.
US Dollar – US Markets
The greenback is trading on a weaker footing against its key peers this morning ahead of today’s preliminary GDP report in the US which is anticipated to show that economic expansion slowed, but remained healthy for the last quarter. Moreover, with the statement of the US Fed’s latest policy meeting expressing confidence towards a solid recovery in the US, prospects of an upside surprise in today’s data cannot be ruled out.
Yesterday, the US Dollar gained sharply against the Pound following the release of upbeat US weekly jobless claims survey. The survey showed that the number of first time jobless benefit claimants dropped more than expected for the previous week, to its lowest level in nearly 15 years. With initial jobless claimants displaying a volatile trend lately, the upcoming readings will be scrutinised in order to ascertain if seasonal adjustments distorted claimant counts during the start of the year. Going forward, traders will eye next week’s official labour market report in the US to gauge the health of the labour market for January.
Euro – European Markets
Data released earlier today showed that retail sales in Germany rebounded for December, as spending among shoppers remained buoyed by cheaper oil. Separately, a preliminary report revealed that Spain’s GDP expanded at a faster-than-expected pace during the final quarter of 2014. The common currency is trading on a firmer footing against the US Dollar this morning. Going forward, investors will closely eye today’s preliminary consumer price inflation data in Euro zone, to verify if a more than anticipated fall in German consumer prices for January weighed on the region’s price trends. Additionally, Euro bloc’s core inflation reading is expected to show an ease for January and offer another evidence of deflationary trends strengthening in the region.
With no other important domestic macro updates, traders will eye the preliminary GDP readings in the US today for further direction in the Euro-US Dollar pair. Furthermore, next week’s revised manufacturing and services PMI readings across key European nations will be eyed to gauge the health of the region’s private sector for January.
Other Currencies – Highlights
The Japanese Yen gained ground against the greenback today, amid mixed economic data released in Japan. On the downside, consumer prices inflation in Japan remained unchanged for December and household spending continued to ease for December. With signs of no pick up in Japan’s consumer price growth and amid signs of softness in domestic demand, market participants remained concerned about the nation’s inflation reaching the BoJ’s 2% target anytime soon. Meanwhile, other publications revealed that Japan’s unemployment rate dropped unexpectedly and industrial production picked up pace for December, strengthening hopes of a rebound in the nation’s economic growth, especially after the economy slipped into a recession recently.
With little on the domestic macroeconomic front, today’s preliminary GDP reading in the US is likely to prove crucial for the US Dollar-Japanese Yen pair.