Quiet Day of Data as the Market Awaits US Jobless Figures
24/Jul/2013 • Currency Updates•
Sterling was little changed against the euro, after an industry report that economists said will show manufacturing improved in July, adding to signs the U.K. economy is strengthening.
Sterling snapped six days of gains versus the dollar. A gauge of orders increased to minus 12 this month from minus 18 in June, Mark Carney previously stated that UK interest rates are likely to remain low for several years to come. Sterling has continued to slowly strengthen against the dollar, and UK mortgage approvals yesterday showed a small improvement in comparison to last month.
Today is slim on data; however we await UK GDP figures for the second quarter released tomorrow. This is meant to show an improvement on the previous figure of 0.6% increase in growth, which is likely to impact the next bank of England’s decision as to whether to look at further Quantitative Easing, during their next meeting due to be held in early August.
Europe’s biggest banks such as Deutsche Bank, UBS, and Barclays along with others, more than doubled their highest-quality capital to $1 trillion since 2007. This was in order to meet tougher rules, but they may still have a long way to go as regulators scrutinize how lenders judge the riskiness of their assets. A spokesperson for Landesbank said Europe’s banks are far from done on efforts to raise capital.
The main data coming out today regarding the euro is PMI, previously coming in at 48.6 and expected to rise slightly to 49.2 for month on month. Along with Year on Year that was previously 48.7 and expected 49.3,
After falling consistently for 4 days the Euro managed to have a slight retrace last night. Any out of line data today regarding PMI for the eurozone could see the markets react one way or another for the currency.
Other than that a relatively quiet week for the Euro.
We saw some movement yesterday in USD, despite the only notable data release out of the US being the Housing Price index for May. It showed an improvement in growth on the previous reading which showed 0.5%, posting a figure of 0.7%, which fell just short of the consensus at 0.8%.
Data is relatively low on the ground today for USD. We are expecting information on manufacturing PMI, thought to post 51.9, which would relate to growth in the US economy, as well as the number of MoM new home sales for June, expecting to post an improvement. Any deviation from the expectations for these two data releases will cause volatility in Dollar.
However, eyes are looking more towards tomorrow, as we await information posted on Durable Goods orders, which are relied upon as a measure of consumer confidence.Other important data include the release of the initial jobless claims figures, which are expected to show an improvement on last months figures.