Poor German data worries EUR

To the UK first where we saw an increase in mortgage approvals by 5.4% in June – helping GBP claw back some of its loses from last week. We also saw positivity yesterday by way of news that staff hiring is now at its quickest rate in over 16 years, according to the job’s index by accounting firm, BDO, who’re seeing numbers at their strongest since 1998. This increase is being attributed to a significant uptake in hiring by companies in the services sector as they look to ramp up efforts over the rest of the year. The UK Government will no doubt be keeping a close eye on proceedings as the health of the job’s market will be a contributor to the ultimate interest rate decision. Speaking of interest rate rises, a recent Bloomburg survey has suggested many economists now believe an interest rate hike to occur sometime around the middle of 2015, particularly now that things seemed to have cooled off in the UK so the pressure’s now off to raise rates ASAP.

There was no data from the Eurozone yesterday so EUR fell against its counterparts somewhat on the back of poor news from Germany that it performed worse that Spain in Q2 for the first time since 2009. German GDP is out tomorrow and the expectation is that it’s due to come in poorly. Any time Germany has an issue there’ll be a knock on effect for the EUR as a whole considering the German’s status as Europe’s powerhaus. There also seems to be the growing realisation that Mario Draghi’s blagging over the euro’s strength might not be having any positive effect and that the central bank now needs to act soon. German data out this morning is expected to be weak and should mean that EUR will probably head into today’s trading already under pressure.

The dollar was without much to lean on data-wise but it was the continuing issues in the Ukraine and Iraq that saw investors looking to the dollar (as usual?) as a safe-haven. God Bless America. With the US’ hopes to use the construction and manufacturing sector’s to help rectify the economy, comments like that made yesterday by Fed Vice Chairman, Stanley Fischer, that there ‘might not be enough people to fill any created positions’ probably don’t help.