Yesterday afternoon we saw the pound gain ground on the euro after around 0.6% a U.K mortgage approvals showed an increase in July to their highest level in 17 months. Banks approved 46,033 mortgages for house purchases; this is the highest number we have seen since February 2014. That was up from 44,802 in June and up 11 percent from 12 months ago.
U.S. durable goods orders rose unexpectedly in July, with core orders topping forecasts rising 2.0% where the figure was widely expected to shrink to -0.4% This helped boost optimism over the health of the economy and supporting the case for a U.S. interest rate hike later this year. The positive data helped push the dollar higher against other major currencies yesterday and added optimism over the strength of the economy.
Yesterday New York Fed President William Dudley bolstered expectations of a delay in the Fed's rate increase. He said a September rate hike seemed less compelling than just a few weeks ago, although he added that "short-term" market volatility did not have significant implications for the U.S. recovery.
We saw some weakness in the Euro yesterday in the wake of comments from the ECB’s executive board who suggested downside risks are increasing to the ECB’s inflation targets. The euro exchange rate complex fell back following the sharp rise seen at the start of the week however it has been reported that many are starting to forecast a stronger Euro ahead on the back of the recent positivity.
We have seen a lot of turmoil in the market this week and the effects can be particularly be bad for Greece. The country is decimated by political uncertainty and much-publicized economic weakness. It is likely to be even further wounded by the volatility on global markets. UBS analysts recently downgraded their forecasts for Greece's growth in gross domestic product to -1.6 percent this year, and -1.1 percent in 2016.
USD: 13:30 – Initial Jobless claims expected fall to 274K from 277K
USD: 13:30 – Gross Domestic Product Price Index (Q2) Expected to stay the same at 2%.