UK Mortgage Approvals Climb
Data just released has revealed that the number of mortgage approvals in the UK climbed for January, bolstering hopes that recovery in the housing market is regaining pace. Moving ahead, tomorrow’s revised UK GDP reading for the final quarter of 2014 is unlikely to show any change from the prior estimate. However, the print’s sub measures will be closely eyed to gain a better insight into Britain’s macro health.
Across the Atlantic, the US Fed Chief expressed confidence in the US economy’s recovery and hinted that the Fed might consider changing its policy stance "on a meeting-by-meeting basis" going forward. In the Euro zone, finance ministers approved the extension of Greece’s bailout by four months yesterday which kept the Euro supported against the majors.
Pound Sterling – UK Markets
The just out BBA report has shown that the number of UK mortgage approvals for January climbed for the first time in the last six months. Considering that various housing market gauges in the UK have remained mixed of late, today’s upbeat data has strengthened hopes that activity in the country’s real estate segment is regaining momentum. Going forward, tomorrow’s revised UK GDP print will attract significant attention among traders and is expected to show that Britain’s economy grew in line with its prior estimates for the last quarter of 2014. However, the print’s consumer spending measure will be closely eyed, particularly considering that government expenditure has played a key role in keeping the UK’s GDP supported of late.
Yesterday, the Pound remained buoyed against the greenback. The BoE Governor indicated that the current weakness in Britain’s inflation is expected to remain short-lived. Additionally, he shrugged off concerns of "deferred consumption" in the UK by hinting that he saw no evidence of consumers delaying purchases in anticipation of a further fall in domestic prices.
US Dollar – US Markets
The US Dollar reversed its earlier gains against the Euro yesterday after Janet Yellen signaled that the Fed was in no hurry to raise rates and would consider interest rate hikes "on a meeting-by-meeting basis". The central bank governor expressed optimism about the economic outlook and inflation in the semi-annual testimony, but there was no clarity on the time frame for tightening. Yellen further stated that when the central bank is ready to move on rates, its first step would be to drop the word “patient” from the FOMC statement. On the macro front, US consumer confidence declined more than expected for February, a month after hitting the highest level since 2007. Meanwhile, the Markit services preliminary PMI in the US showed a robust increase in service sector activity for February, supported by new business gains.
The greenback is trading lower against its key peers this morning, ahead of new home sales data for January scheduled in the US today. Additionally, the Fed Chairperson will testify again in front of the Congress committee and cues from the testimony will keep traders on their toes.
Euro – European Markets
The Euro edged higher against the greenback in yesterday’s trading session, following upbeat GDP growth in Germany and after the Fed chief hinted that the US central bank was in no hurry to raise rates soon. German GDP growth for the fourth quarter of the last year was in line with the preliminary print released earlier. However, consumer prices in the Euro zone slipped for February, worse than the previous month’s decline, albeit in line with broader expectations. This has renewed deflationary fears in the Euro bloc, ahead of the start of the bond buying programme of the ECB. Meanwhile, the Euro zone approved Greece’s comprehensive reform plan locking in a four month bailout extension for the debt-ridden nation. This extension removes the risk of an immediate Greek exit from the Euro bloc.
The single currency is trading higher against the majors this morning. The ECB President Mario Draghi is scheduled to testify to the European Parliament today, ahead of the launch of its quantitative easing programme in March. The ECB President is expected to shed light on the inflation outlook in the Euro area.
Other Currencies – Highlights
The Australian Dollar reversed its earlier losses and climbed to its highest level for the month of February against the greenback in today’s trading session. The US Dollar traded lower against the Australian Dollar after the Fed Chairperson hinted that an imminent interest rate rise was unlikely for at least the next couple of FOMC meetings. Elsewhere, the Chinese manufacturing flash PMI data showed signs of revival in the nation’s economy, supporting gains in the Aussie.
The Australian Dollar was boosted early in the morning on the back of relatively positive economic data from the nation. The Australian Bureau of Statistics, in its report, indicated that construction work done slipped in the fourth quarter of last year but fell less than market expectations. Another report showed that Australia's wage price index rose in the final quarter in-line with anticipations.