GBP gains on mortgage rebound

Today's Highlights

No change from US Fed

GBP gains on mortgage rebound

Sharp recovery forecast from US GDP data

FX Market Overview

Sterling had another good day after UK mortgage data showed a healthy rise in lending for June. There is a mortgage price battle going on (so the newspapers say) and it would appear that many buyers decided to wait until after the UK election had been settled. I would guess that, with the Bank of England warning of interest rate hikes at the year-end, there is enough incentive for buyers to act early.

The US Federal Reserve left their interest rates on hold yesterday as everyone expected. There was no change of emphasis other than a comment about the improving nature of US data but that wasn't enough to move the US Dollar. So the event was a bit of a damp squib but it did come a day ahead of the release of the US economic growth data. If that is in line with the substantial rebound most analysts are forecasting, the USD will strengthen in later trade. Beware if you are a USD buyer.

This morning starts with a swathe of European data including German unemployment, several economic growth reports and Eurozone consumer and business confidence indices. The possible permutations of result are too numerous to call and you would have to be a brave trader to get heavily long or short of the euro ahead of all this news. Those who are braver than a man in a lion costume at a Minnesota dentist conference might opt to buy some euros because the overall tone of the forecasts is positive.

There is no meaningful UK data during this trading session. We will get the Gfk consumer confidence index overnight tonight but that's your lot. That would suggest Sterling will bob and weave in the wake of the European data.

Aden in the category of one who will either be a prophet or forgotten, a film maker has posted a video online showing strange lights above Manchester. He suggests the nature and number of the 'UFOs' may be the prelude to an alien invasion. Now most of us will scoff at the very notion of an alien invasion but, what if he is right. I guess we will be too busy dodging death rays from glowing eyes to have time to hail him as a hero but as he is engulfed in a green glowing laser beam, he can at least say 'I warned you'. The rest of us are going to look pretty silly aren't we.