Despite
data showing on Friday that the UK grew by 0.8% in the third quarter, the
pounds performance continued to be lacklustre yesterday following comments made
by Bank of England economist David Miles. 

Despite
data showing on Friday that the UK grew by 0.8% in the third quarter, the
pounds performance continued to be lacklustre yesterday following comments made
by Bank of England economist David Miles. 

Miles
seemed to give out a warning to those anticipating an interest rate rise before
the recent projections by the BoE. Miles stated that it would be “pretty catastrophic”
to raise interest rates based on the good news about the economy over the last
six months and before we see a meaningful in unemployment. He did however
comment that the impact of the recent storms in the south east of England would
only cause a ‘blip’ in fourth quarter GDP. 

Retail
figures from the Confederation of British Industry showed that only 2% of
retailers reported an increase in sales in October, a sharp drop from the 34%
that we saw in September. 

The
US dollar drew some support yesterday after data revealed that US industrial
production rose by a 0.6% last month, above expectations for a 0.4% rise and
the fastest increase in seven months.

However gains for the US dollar were limited as US pending home sales fell 5.6%
last month, down for the fourth consecutive month and well below market calls
for a gain of 0.1%. 

Overnight
Japan saw some encouraging data as the unemployment rate remained at 4% and
retail sales increased to 0.7% in September after a fall of 0.1% in August. The
data should alleviate any immediate concern that the Bank of Japan may look to
increase stimulus when the central bank meet later this week.

The
Australian dollar came under pressure again following comments made by Reserve
Bank of Australia Glenn Stevens that the currency’s present levels aren’t supported
by costs and productivity in the economy. He is of the opinion that the
currency will be ‘materially lower’ than currently. 

Data
released this morning showed that consumer confidence in France remained at 85
just missing an expected rise to 86. Mortgage approvals increased in September
to 66,735 from 63,396 in August giving the pound a boost in early trade

Key Announcements:

12.30pm
– USD – Producer Price Index (Sep): Expected to have risen by 0.6%.

12.30pm
– USD – Retail Sales (Sep): Expected to have only by 0.1%.

14.00pm
– USD – Consumer Confidence (Oct): Expected to fall to 75.3