End of Greek Saga…for now
Yesterday saw the Pound pick up further gains versus the Euro, erasing some of the losses from the back end of last week when we witnessed a fresh 7.5 year interbank high of 1.4415. The move came largely as a result of the UK GDP results which produced a tenth consecutive quarter of strong and consistent growth for the first time since pre-2008. The figures released showed us that the UK economy grew by 0.7% for Q2 this year, surpassing the previous publishing of 0.4%.
However, today’s focus will be on the Fed’s monetary policy statement and rate decision at 6pm. The markets are anticipating Janet Yellen furthering comments about raising interest rates this year and a modestly upbeat analysis of US Economic performance. With some predicting two rate hikes this year, anything less than concrete proposals for a rise in September will disappoint the US Dollar bulls. At present the Dollar is trading steady, picking up marginal gains versus its most traded counterparts through yesterday and capping Sterling at 1.56 (interbank).
Over in Greece the ECB has given permission for the Athens Stock Exchange to reopen after a month, although the timing is uncertain it does indicate a return to normality. ECB governing council member Christian Noyer has noted that risk of Greek contagion for European banks is now ‘next to zero’ and added that ‘risk of Grexit is now behind us’. We should now see a return to focusing on economic performance in Europe, which will be welcomed by all who feel bilious after a surfeit of Greece.
Today’s data will consist of Mortgage Approvals, Consumer Credit and M4 Money Supply from the UK this morning and the much anticipated US Rate Decision this evening.