Daily Market Report 24/12/13

USD

The US dollar weakened across the board yesterday following lacklustre data across the Atlantic.

Personal income in the US only increased by 0.2% in November, missing expectations of a rise of 0.5%. The core personal consumption expenditure, another measure of inflation, remained at 1.1%, when analysts were expecting a rise to 1.2%. Personal spending only rose in line with forecasts to 0.5% from 0.4% and the Reuters/Michigan consumer sentiment index failed to rise in line with analysts’ expectations.

Given that consumer spending accounts for 70% of the US economy, the figures above are somewhat disappointing, not painting the most optimistic picture about consumer spending in the US and thus causing the US dollar to weaken.

CAD

The Canadian dollar received a welcomed boost yesterday as economic growth for October remained at 0.3% instead of falling to 0.2%.

GBP

The pound received a welcome boost this morning as BBA mortgage approvals increased to a four year high to 45,000 in November surpassing expectations of a rise of 44,500. Gross mortgage borrowing jumped to £10.3bn, 37% higher than the previous year with the BBA crediting assistance schemes such as the governments ‘Help to Buy’ scheme for this jump.

EUR

Data from France disappointed this morning as third quarter final GDP figures showed that the economy contracted by 0.1% as consumer spending growth slowed and exports and investments dropped. The euro dropped off the back of the news by approximately 0.2%, as fears of France entering into a recession intensified.

Key Announcements:

13.30pm – USD – Durable Goods Orders (Nov): Expected to rise to 2.0%