The pound continued to be supported ahead of Thursday’s second quarter GDP figures from the UK, finishing 0.7% higher against the US dollar and 0.37% against the euro.

Thursday’s data is set to reveal that the UK expanded even further in the second quarter to 0.6% from 0.3% in the first quarter. But before that, data from the BBA this morning is set to reveal mortgage approvals increased from 36,100 to 38,500 in June. A good figure here should provide further support for the pound.

The pound continued to be supported ahead of Thursday’s second quarter GDP figures from the UK, finishing 0.7% higher against the US dollar and 0.37% against the euro.

Thursday’s data is set to reveal that the UK expanded even further in the second quarter to 0.6% from 0.3% in the first quarter. But before that, data from the BBA this morning is set to reveal mortgage approvals increased from 36,100 to 38,500 in June. A good figure here should provide further support for the pound.

The US dollar continued its recent weakness as existing home sales change fell to 1.2% and the number of sales fell from 5.14mln to 5.08mln. As the US dollar continues to be underpinned by continued speculation of tapering of the it’s monetary stimulus program, it would appear that Bernanke’s recent comments and data have settled markets with the realization that Fed policy may remain accommodative for now

The US will come under focus this afternoon with housing price data set to improve in May but data from the Richmond Fed manufacturing index is set to show a fall in July.

The euro drew some support yesterday, mainly against the US dollar, amid optimism that Portugal’s government will remain in office until 2015 – President Anibal Cavaco Silva stated that the current government will stay in place and the possibility of an early election is unlikely. This should give the nation time to complete its EU led bailout deal.

The euro zone will come under focus also this afternoon as consumer confidence is expected to improve marginally for the month in July.

Key Announcements:

9.30am – GBP – BBA Mortgage Approvals (Jun): Expected to improve to 38,500.

13.30pm – CAD – Retail Sales (May): Expected to improve to 0.3%.

14.00pm – USD – Housing Price Index (Jun): Expected to improve to 0.8%.

15.00pm – EUR – Consumer Confidence (Jul): Expected to improve marginally to -18.3.

15.00pm – USD – Richmond Fed Manufacturing Index (Jul): Expected to fall to 7.