UK Export activity shows signs of recovery
In the UK, the British Chamber of Commerce reported exporting activity is at its highest level since 2007 in the latest sign of a strengthening recovery in the economy. Its trade index rose to 118.2 in the second quarter, up 2.9% on the same period last year. The report confirms export orders for service firms hit a record high while 42% of manufacturers reported higher export sales.
Also, the number of UK mortgage approvals rose to a seventeen month high in June as the recovery in the housing market gathered pace. The British Bankers Association (BBA) reported that 37,278 loans were approved worth £8.9 billion in June. This is the highest monthly release since January 2012, when the stamp duty concession for first-time buyers was ending prompting a flurry of activity.
In the eurozone, French business confidence increased more than expected in July driven by higher domestic orders and an improved overall business outlook. The index rose by 2 points to 95, the highest reading in 15 months. However, further improvement may be limited by the export orders which remain fragile.
Sterling continues to gain support from investors ahead of tomorrow’s preliminary reading of Q2 GDP. GBP/USD consolidated around $1.5350 while GBP/EUR remains above the €1.16 level. Meanwhile, EUR/USD pushed through $1.32 with this morning’s PMI reading a key influence going forward.