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Overview
The first half of European trade was a relatively subdued affair as the USD-index resided in relatively neutral territory amid a distinct lack of pertinent newsflow. The main mover in the first half of the session was GBP, after the final Y/Y UK GDP reading fell short of expectations by coming in at 2.6% vs. Exp. 3.0%. Thereafter, ahead of the raft of US data releases, FX markets sat tight with EUR seemingly unphased by the failure of Stavros Dimas to secure the required 200 votes in the Greek Presidential elections, with voting now set to progress to a third round.
In terms of today’s US data releases, US GDP stole the headlines by coming in at 5.0% vs. Exp. 4.3% and personal consumption at 3.2% vs. Exp. 2.5%. This subsequently saw USD out-muscle its major counterparts as the USD-index broke above the 90.00 level for the first time since 2006. This weighed on EUR/USD which broke below 1.2200 to print fresh YTD lows, while exerting further pressure on GBP/USD which traded at its lowest level since September 2013. Thereafter, FX markets proceeded in a relatively rangebound manner as is to be expected during the festive period with markets now looking ahead to tomorrow’s US weekly jobs release.
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