GBP has appreciated 10.5 percent against the dollar in the past year

Good morning from a sunny Hamburg and welcome to our Daily FX Report. Twitter Inc´s monthly active users rose a better-than-expected 24 percent in the second quarter as the online messaging service mostly succeeded in stemming a dwindling pace of growth, sending its shares soaring after hours. IMF warns of potential risks to global growth as sharply higher interest rates around the world could combine with weaker growth in emerging markets to slice as much as 2 percentage points off global growth in the next five years.

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Market Review – Fundamental Perspective

GBP has appreciated 10.5 percent against the dollar in the past year, the most among 31 major currencies tracked by Bloomberg. Against a basket of nine other developed-market peers, it has gained 11.4 percent. Yesterday the International Monetary Fund said in its External Stability Report that the GBP is overvalued by 10 to 15 percent. After raising their forecasts to as high as $1.70, the median estimate of more than 60 strategists in a Bloomberg survey is that it might stay little changed at $1.69. Britain´s currency has been driven higher by the nation´s recovery, with growth domestic product seen expanding this year by 3 percent in survey of more than 50 economists by Bloomberg. There are speculations that Bank of England will raise the bank´s 0.5 percent main interest rate in 2015. Higher rates tend to attract international investment. Mark Carney, Governor of Bank of England, tempered those expectations, saying increases will, once they start, be “gradual and limited”. He said “extraordinary forces” still confront the U.K. economy. Before the speech on July 23 the GBP versus USD reached an almost seven-year high. The USD was traded at 1.3411 per euro. The Bloomberg Dollar Spot Index gained the most in six weeks yesterday, rising above its 200-day moving average, before data today forecast to show the U.S economy rebounded last quarter. It raised to 1,016.67. The euro was near an eight-month low after German benchmark yields dropped to a record as the European Union and U.S. increased sanctions against Russia. Germany is forecast to report today that inflation slowed this month.

Daily Technical Analysis

USD/TRY (1 Hour)

At the beginning of the last week the Turkish currency could gain a considerable value against the USD from around 2.1205 to the support line at 2.0867, where the bears have lost control. The second half of the week the bulls took the currency pair towards the resistance at 2.12055. According to the Momentum the pair is overbought, but there is still room for upward movement, especially in anticipation of strong economic U.S data.

Support & Resistance (1 Hour)