GBP 

The
pound saw broad support yesterday following ‘balanced’ comments by BoE Governor
Mark Carney when questioned by the Treasury Committee. 

GBP 

The
pound saw broad support yesterday following ‘balanced’ comments by BoE Governor
Mark Carney when questioned by the Treasury Committee. 

Carney
told the committee that the UK economy is the strongest major advanced economy
in the world but the recovery is still in its early stages and thus the BoE are
in no rush to raise interest rates anytime soon. Carney reiterated his recent
comments as well, stating that the 7% unemployment rate is a threshold where
policy makers will consider hiking up interest rates and thus not a trigger. 

The
comments were hardly surprising but the pound was supported ahead of revised
third quarter GDP figures released this morning. 

EUR 

The
euro strengthened against most of its peers yesterday amid speculation that the
ECB won’t look to lower interest rates or roll out quantitative easing any time
soon. Recent comments made by a small number of members of the central bank
have suggested further easing could occur soon. However it would appear now
that the consensus is for the ECB to defer any monetary stimulus for at least
another two months. 

USD 

The
US dollar declined against most of its peers after consumer confidence figures
unexpectedly fell in November, keeping alive the thought that the US
quantitative easing programme will continue until March 2014. 

This
data offset encouraging data released earlier on in the afternoon that the
number of building permits unexpected rose by 6.2% in October. 

AUD

The
Australian dollar continued its recent decline as markets have once again
become warm to the idea that the RBA may look o lower interest rates further in
the first quarter of 2014. Recent comments had been made by members of the RBA
that the currency was far too overpriced to help with exports out of the
country. 

Today 

As
already mentioned above, data from the UK this morning is expected to show that
the UK economy expanded at its fastest pace since 2010 in the three months
through September to 0.8%. We would expect the pound to gain but given that we
are near long term resistance levels against both the euro and the US dollar,
the gains could well be limited. 

German
consumer confidence is set to have improved very marginally but this should add
to the recent support for the euro. 

Data
from the US looks set to be fairly mixed with durable goods orders set to have
fallen by 1.9% in October and the number of people filing for jobless claims is
set to have increased by 7,000. However consumer sentiment figures released
from Reuters/Michigan are forecasted to have improved in November. Whilst there
is potential for the US dollar to weaken, that weakness could well be limited. 

Key Announcements: 

9.30am
– GBP – Gross Domestic Product (Q3): Expected to have improved to 0.8%. 

13.30pm
– USD – Durable Goods Orders (Oct): Expected to have fallen by 1.9%. 

13.30pm
– USD – Durable Goods Orders ex Transport (Oct): Expected to have improved by
0.5%. 

13.30pm
– USD – Initial Jobless Claims (Nov 22): Expected to have increased to 330,000. 

14.45pm
– USD – Chicago PMI (Nov): Expected to have dropped to 60. 

14.55pm
– USD – Reuters/Michigan Consumer Sentiment Index (Nov): Expected to have
increased to 73.5.