Both Euro and Pound expected to rise
There is a large chunk of data coming out of Germany today, with second-quarter gross domestic product numbers along with construction, import and consumption figures. The final revision of Germany’s GDP is expected to confirm estimates showing a 0.7% quarterly increase, the best reading in over a year.
The news flow out of the Euro Zone has steadily improved since April suggesting the market is underestimating the extent of recovery that’s underway. This opens the door for an upside surprise which may well give the Euro a boost. Similarly, the revised set of UK GDP figures may also outperform given impressive results on the macro data front since March, making for more forgiving BOE expectations and bolstering the British Pound.
Later in the day, the spotlight returns to Federal Reserve as the first full day of the Jackson Hole Economic Summit gets underway. The Fed Chairman Ben Bernanke will be absent at this year’s meeting but Vice Chairman Janet Yellen will be in attendance. Yellen is one of the leading candidates to replace Bernanke when his tenure ends in January 2014. With that in mind, the market will be keen to hear what she has to say regarding the US economy.
The Euro strengthening a little and now standing at 1.1680. GBP/USD pretty much unchanged at since yesterday at 1.5590 and the EUR/USD trading at 1.3345.