Can Sterling Keep Its Momentum?
After a promising start for sterling early doors, the action on markets yesterday was rather muted. With a quiet data calendar and the US Fed meeting not concluding until after the close in Europe, this was perhaps to be expected.
The meeting provided few surprises with the central bank leaving policy unchanged as expected. In terms of the dollar, the currency was slightly down across the board following the meeting. This suggests currency traders may have been hoping for somewhat stronger guidance from the Fed.
As we get underway this morning, the slightly softer dollar tone is reflected in EUR/USD starting up at the midpoint of $1.18-1.19. GBP/USD has regained some ground in $1.39 territory. Early trading has EUR/GBP struggling to break the 85p mark.
Looking ahead to today, the key release from the US is the first batch of Q2 GDP data. Early signs indicate that US GDP is expected to register an 8.5% annualised growth rate, this is due to the economic boost in the quarter supported by the vaccine rollout and fiscal stimulus.
Meanwhile, the main focus in the Eurozone is the EC sentiment surveys for July. They are expected to show further improvement. However…neither data release may have much impact on their respective currencies.