GBP 

The
pound continued to be buoyed yesterday as data revealed that UK service sector
activity, which makes up 70% of total GDP, grew at its fastest rate since May
1997. Along with last months impressive manufacturing and construction figures
as well, the data suggests, according to Markit, that the UK is growing at a
rate of 1.3% for the fourth quarter, from 0.8% in the third quarter. 

GBP 

The
pound continued to be buoyed yesterday as data revealed that UK service sector
activity, which makes up 70% of total GDP, grew at its fastest rate since May
1997. Along with last months impressive manufacturing and construction figures
as well, the data suggests, according to Markit, that the UK is growing at a
rate of 1.3% for the fourth quarter, from 0.8% in the third quarter. 

Data
from the UK’s manufacturing and industrial sector also showed that output
increased further in September, lending to further support for the pound this
morning. 

Recent
data may cause the Bank of England to raise its growth forecasts for the UK and
may even prompt members of the MPC to bring an interest rate closer. The BoE is
scheduled to release their latest interest rate decision this Thursday. 

EUR 

The
euro began the day on the back foot following data showing that the number of
additional unemployed people in Spain for the month of October increased by
almost 3 ½ times more than in September. 

The
euro continued to fall after the European Commission downgraded its growth
forecasts for the Eurozone to 1.1% from 1.2% for 2014. The Commission also
raised their concerns at the level of unemployment, predicting for the
unemployment rate to hit 12.2% by the year end. 

Producer
price inflation also fell by 0.9% for the month of September. 

Service
sector figures from France, Germany and the Eurozone have all beat expectations
this morning but activity has dropped since September. 

USD 

The
US dollar drew some support as America’s service sector grew more that expected
in October to 55.4 from 54.4 in September, despite the government shutdown.
Gain in the US dollar, however were limited ahead of the key labour market data
due to be released on Friday showing that the unemployment rate is set to have
increased to 7.3% in October. 

CHF 

The
Swiss franc came under further pressure following data revealing that the rate
of deflation increased further to 0.9% for the month of September. 

NZD 

New
Zealand’s rate of unemployment fell more than expected in the third quarter to
6.2% from 6.4% in the second quarter. The data adds to the recent optimism
echoed by the Reserve Bank of New Zealand’s Governor and may put pressure on
the RBNZ to hike up interest rates in the first half of next year. 

Today 

Data
this morning is expected to show Eurozone retail sales and German factory
orders are expected to have improved in September, but movements in the euro
could well be minimal especially ahead of tomorrow’s interest rate decision and
subsequent press conference by Mario Draghi. 

The
pound should continue to be supported so long as data shows that manufacturing
and industrial output increased in September. The NIESR is also set to release
its latest GDP estimate for the UK. 

Key Announcements:

10.00am
– EUR – Retail Sales (Sep): Expected to increase by 0.7%. 

11.00am
– EUR – German Factory Orders (Sep): Expected to increase by 0.7%. 

13.30pm
– CAD – Building Permits (Sep): Expected to increase by 6%. 

15.00pm
– CAD – Ivey Purchasing Managers Index (Oct): Expected to increase by 54.7.

15.00pm
– GBP – NIESR GDP Estimate (Oct): Previous estimate at 0.8%.