GBP/USD remains supported at 1.71 as a busy week shapes up

United States Dollar:

GBP/USD continues to find support at 1.71. UK construction data on Friday printed weaker than expected and saw cable fall from 1.7147 to a low of 1.71. Output declined 1.1% from April to May and it dragged on the pound. All in all it was a very quiet week last week but data wise, things are set to get going a bit more this week, especially early on with UK inflation data due for release on Tuesday and a speech by Bank of England Governor Carney on the same day. UK employment data then falls due on Wednesday. On Monday ECB President Draghi is speaking and in terms of data the main event in Europe will be German ZEW. From the US we have retail sales, producer price data and the Philly Fed Manufacturing Index whilst Fed Chair Yellen is due to testify before the House Financial Services Committee – markets will be hoping for stronger signs of when the Fed intend to raise interest rates although the chances are thin given there was no mention of this in the FOMC meeting minutes last week.

We expect a range today in the GBP/USD rate of 1.7100 to 1.7165

Euro:

EUR/USD was steady for most of Friday’s session. It is making solid gains this morning though, spurred on by the early bounce in European equities. The pair has pushed on through the 1.36 figure and opens this morning at 1.3630. Later on today European Industrial Production data is released before ECB President Draghi steps up to give an introductory speech before the Committee on Economic and Monetary Affairs of the European Parliament. As the euro breaks higher this morning the effects are being felt in GBP/EUR – it’s back off of 1.26 and trades at 1.2560 currently.

We expect a range today in the GBP/EUR rate of 1.2520 to 1.2600

Aussie and Kiwi Dollars:

RBA Governor Stevens gave an interview over the weekend and said that he thought the recent increases in interest rates had not had their full impact on the economy yet. He also suggested that interest rates in Australia would remain on hold and went on to say that the high exchange rate was dragging on the economy. AUD/USD has not reacted too negatively though and the pair opens in London at .9395. NZD/USD has been steady overnight and trades ta .8820 whilst it’s also been steady vs. the pound – GBP/NZD trades at 1.9415.

We expect a range today in the GBP/AUD rate of 1.8160 to 1.8300

We expect a range today in the GBP/NZD rate of 1.9360 to 1.9500

Data Releases for the next 24 hours:

AUD: Monetary Policy Meeting Minutes, New Motor Vehicle Sales m/m

EUR: Industrial Production m/m, ECB President Draghi Speaks

GBP: BRC Retail Sales Monitor y/y

NZD: No data

USD: No data