UK GDP data should show upturn

Today's Highlights

Sterling slips on lower retail sales

UK GDP data should show upturn

FX Market Overview

Scotland started the Commonwealth games in the manner they would like to continue in and so did the English. Home crowd encouragement makes a real difference. Onward and upwards for the GB athletes.

It was a downward day for the Pound yesterday. Poorer than expected UK retail sales caused a sell off that dropped the Pound back below 1.70 against the US Dollar and half a cent lower against the Euro. There was also a lot of comment about the slowdown in the UK housing market and about the International Monetary Fund's downgrading of global growth forecasts. Today brings the 1st estimate of Quarter 2 economic growth. There is a lot of excitement about the economy having picked up to pre-crash levels but this is a very different sort of recovery; a slow recovery in fact and that is probably not a bad thing. Sustainability is the key word and Britain would definitely benefit from a long slow period of sustainable growth. I suspect Sterling will bounce in later trade. The GDP numbers are due to be published at 08:30 GMT. Before that we get the German IFO business climate index and that should reflect a small scale decline in optimism. We will also get some money supply data from the EU. Europe has not had a good week but there have been highlights which have sustained the Euro itself.

This afternoon brings the US Durable Goods orders; a key measure of confidence for the US manufacturing industry. The US Dollar made some headway against the Pound yesterday but the Euro - US Dollar exchange rate has fallen through a significant technical level (trend line support which has been in place since mid-2012) which may well leave room for a drop to $1.32 in the weeks ahead. It will depend on where it ends the week but watch this space.

Once we have got all of this out of the way, we are back into another weekend. I just hope we can all cope with the relaxing and chilling.

I will leave you with a story titled 'overreaction'. A four year old boy asked a rather overweight lady in a doughnut shop in Monroe, Connecticut whether she had a baby in her belly. His mother immediately apologised to the woman and she seemed happy with the apology but the store's staff members were outraged' and banned the four year old from their store for being rude. Now, if you step back from that story for just a moment and think it through; I would suggest the staff of the doughnut store are the ones with the problem.