Pound resurgent ahead of Bank Holiday Weekend
Sterling recorded gains for a third straight day against the Euro and the Dollar, reaching fresh three-week highs versus the Dollar – above 1.3230. The Pound also penetrated the psychological barrier of 1.1765 against the Euro and soared above 133.00 versus the Japanese Yen.
Today the CBI Survey is the only data release from the UK. This is a review of about 125 retail and wholesale companies which asks respondents to rate the relative level of current sales volume. With the August Bank Holiday looming, beware position adjustments towards the end of the week which may cause unforeseen volatility and unexpected moves.
In the US, existing home sales data dropped to 3.2% due to a lack of supply to feed demand. There is plenty of speculation surrounding Federal policy ahead of Janet Yellen’s speech on Friday at the Jackson Hole Symposium. Market participants will be keen to see whether or not there will be any comments regarding an interest rate hike in the near future.
US Durable Goods Orders data for July is due for release today along with initial insight into Services PMI for August. Also weekly Unemployment Claims will show if the US employment boom continues.
The Euro weakened by 0.6% versus the Pound during yesterday’s European trading session. This was due to the German Final GDP (quarter-on-quarter) remaining at 0.4% despite expectations of a negative impact from the UK’s EU referendum. German GDP print for Q2 2016 clearly pointed to signs of a possible economic slowdown in the Eurozone’s largest economy. Sterling extended its gains against the single currency and ended the day at around the 1.1748 levels.
Data to Watch: 7 EUR German Ifo Business Climate. 11am GBP CBI Realized Sales. 1:30pm USD Durable Goods Orders month-on-month, USD Unemployment Claims. 2:45pm Flash Services PMI.