USD

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

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%