US data this afternoon may support the Greenback

Today's Highlights

Strong US data fails to rally the dollar

UK Q3 GDP expected to be unrevised

US data this afternoon may support the Greenback

FX Market Overview

The US arm of the Save The Children Charity has come under intense pressure; both from its own staff and from outside parties over an award they presented to Tony Blair for his work on African poverty. The petition which has been signed by 90,000 people and the complaints from staff cite the death toll from the widely condemned decision to invade Iraq in 2003 as overshadowing anything he may have done with debt relief. It looks very much as though Save The Children have failed to save their own credibility.

Tuesday produced very little data in early trade but the US economic growth data certainly got the party started. US GDP growth for the third quarter of the year was revised up to 3.9% against a forecast of 3.3% and previous estimate of 3.5%. So not only was the adjustment in the opposite direction to forecasts but the size of the shift was much greater than anyone would have expected. The Dollar failed to react positively for very long to the news and in fact it was sold towards the end of yesterday's session after it was reported that consumer confidence unexpectedly dropped to 88.7 in November. Perhaps this shows just how long of dollars the market currently is and we need to wait for further news for the next catalyst for more dollar strength.

We heard this morning that average credit ratings have fallen across the major economies of the Eurozone. By way of contrast, the UK saw a rise in average credit ratings through 2013 according to credit rating agency, Creditsafe. Whilst that didn't move the market in itself, it is symptomatic of the mood across the markets that the Eurozone authorities are doing too little too slowly to keep pace with the general upturn in the US, UK and Australasia.

This morning's release of UK third quarter GDP growth is expected to be unrevised from its initial estimate of 0.7% q/q. the second estimate brings a more detailed breakdown and there should be a solid 0.5% rise in consumer spending allayed with strong investment growth. The CBI's retail survey will also be released this morning. My view is that despite stronger growth the benign inflation picture should keep the Bank of England in hold for the next couple of quarters at least.

Although the dollar weakened yesterday the US data overall this week has been broadly supportive of the dollar. With the Thanksgiving holiday due tomorrow we get a plethora of release before the end of the month. Today durable goods orders and personal income will be the main focus however jobless claims and Michigan sentiment are also due. I continue to see scope for US interest rates to move higher heading into the middle of next year and remain positive on the dollar. Today's data should support that view.