Canadian retail data awaited

Today's Highlights

Sterling tense ahead of BOE minutes

Canadian retail data awaited

NZ interest rate hike expected tonight

FX Market Overview

The EU is under intense criticism from within and without for their limp response to a call for sanctions against Russia. There was a band called the Adventures of Stevie V who released a dance track in 1990 called Dirty Cash (Money Talks) and for some reason it keeps ringing around my head. Can't think why.

We heard overnight that Australian inflation for June as in line with expectations at 0.5% on the quarter. The Australian Dollar gained some strength from that.

It is a big day for the Pound. The minutes from the last bank of England meeting are being published at 08:30 GMT. No change was made at that meeting but the tone of the conversation will be influential in the direction of the Pound. We will also get to see mortgage lending data from the British bankers Association and the retail market report for the Confederation of British Industry. Both of these reports are forecast to be quite upbeat so the Pound, which is already at a 2 year high against the Euro, could well make that leap to €1.2750 that is overdue.

For the euro, the news includes French and German business sentiment indices and a Eurozone wide consumer sentiment index. None of this is expected to set the euro on fire so it is likely to take its cues from the pound and US Dollar.

This afternoon brings Canadian retail Sales data. The expectation is that this will be a soft report and the Canadian Dollar; which is already quite weak, is likely to end the day at weaker levels still.

Later tonight we are likel7y to see the reserve Bank of New Zealand raise their base rate by yet another 25 basis points as they continue to try to temper the boom in domestic housing prices. The Kiwi Dollar is surprisingly flat ahead of that announcement but; assuming the RBA does as is expected, we will see strength in the NZD before the sun rises tomorrow in the UK.

And far away from the financial markets, as Scotland builds up to the Commonwealth Games, the idea of men in kilts hasn't reached the Pardubice store in the Czech Republic. A Kilt wearing man was ejected from the store for wearing clothes that didn't meet the store's code of conduct. When the man complained, the letter he received said, "The shopping centre has a clear code. If you can't respect it, you should visit other places." I suspect a lot of Scots will heed that advice. They'll probably go to shops run by grown ups.