The Dollar strengthened following the release of the minutes of the July FOMC meeting, the contents of which do not alter the markets expectation for a tapering of asset purchases at the September meeting. The FOMC appeared comfortable with where market expectations were for the timing of tapering and the onset of policy rate hikes heading into its July meeting and reaffirmed that purchases would end when the unemployment rate was in the vicinity of 7%.

Tomorrow brings the next big event with UK GDP vs German GDP. Markets are expecting a figure of 0.6% for the UK’s Q2 GDP figure whilst it expects a figure of 0.7% for the German equivalent. A lower figure for either country would cause a weakening of the relevant currency.

Looking ahead at next week, we enter one of the quietest weeks of the year, with a Bank Holiday in the UK on Monday and a very light data release calendar thereafter, we expect tomorrows movements to set the trend for the rest of August.