Daily Market Report – 25/06/2014

During morning trading we had an speech from Carney. He stated that the UK economy may not be as strong as had previously been stated in terms of growth. He also suggested that CPI is due to for a potential fall compared to May’s figures as we have not had the late Easter holiday this month. 

With regards to inflation, we may also see a fall on the back of the supermarket price wars, so despite a growing economy consumer spending may be down. These factors attributed to GBP losing ground against its major counterparts as these comments dampen the likelihood of an interest rate rise. 

From Europe yesterday we had the German IFO business climate index released.The index tracking the business climate fell to 109.7, compared to estimates of 110.3, and down from 110.4 last month

The German economy fears the potential impact of the crises in Ukraine and Iraq, IFO President Hans-Werner Sinn said in a statement. Despite this the EUR gained some ground against both GBP and USD.

US consumer confidence index has hit its highest level since January 2008, jumping from 82.2 last month to 85.2.The number of new home sales has also hit a six-year high, surging by 18.6% to an annual rate of 504,000 new homes in May

These positive figures caused the  US dollar to gain for the most in a month against the pound. With new homes starts and new home purchases rising in the US we could see the economy recover in a similar way to the UK, with the UK recovery underpinned by housing prices.  

Key Announcements:
13.30 - USD - Gross Domestic Product Q1 2014 expected to contract 1.7%
13.30 - USD - PMI Services (June) expected to rise from 58.1 to 58.6
13.30 - USD - Personal Consumption Q1 expected to remain flat at 1.2% growth

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