The Euro made gains against the other major currencies yesterday, but safe haven demand remained supported amid lingering concerns over the potential effectiveness of measures outlined by the European Central Bank to stem the long running debt crisis in the Eurozone.
Even with all the European leaders showing unity and togetherness over the past few days, sentiment towards the Euro remained fragile after the ECB indicated last week that it may restart its bond buying program in order to help lower Spanish and Italian borrowing costs. Many investors remain wary amid concerns over how effective the ECB’s new bond buying program would be in light of the differences from the bank’s existing scheme.
It looks as if we are about to embark on a detrimental day for Sterling. All data due today, which includes, industrial production, manufacturing productions and 2nd quarter GDP estimates are expected far lower than previous, meaning that there is potential for investors to aggressively sell the great British Pound. The Bank of England could also cut its forecast for growth in Wednesday’s quarterly inflation report, increasing the likelihood for further stimulus measures from the central bank.
Regardless of the recent highs one may have noted it is still a good rate to hedge GBP/EUR requirements.
09.30 - GBP Industrial Production (YoY) (JUN) – This is expected to come out at -5.0% from the previous figure of -1.6%. If this is the outcome this will be deemed extremely negative for the Pound.
09.30 – GBP Manufacturing Production (YoY) – This is expected to come out at -5.6%, from a previous figure of -1.7%. If this materialises this could be damaging for the Pound.
10.00 - EUR Italian Gross Domestic Product s.a. and w.d.a. (YoY) (2Q P) – This is expected at -2.5% from the previous figure of -1.4%.
11.00 - EUR German Factory Orders n.s.a. (YoY) (JUN) - Measures the total change in orders placed at domestic manufacturers. The figure gives a picture of the strength of demand for German industrial products. This is expected to be negative at -7.0% from the previous figure of -5.4%.
15.00 - GBP NIESR Gross Domestic Product Estimate (JUL) – This is expected at -0.2%.
20.00 - USD Consumer Credit (JUN)
To get a live exchange rate login to RationalFX now, or call +44 (0)20 7220 8181.