US GDP data out today set to draw attention

A survey was released by the Confederation of British Industry yesterday, which gives an indication of short-term trends within the retail and wholesale distribution sector. The report produced a positive reading of 39 from a forecasted 30. This result has a compelling impact on the formulation of economic policy at the Bank of England and a higher reading is seen as more positive for the economy. Fundamentally, the economic calendar produced no high impact data yesterday. However, GBP/EUR still witnessed a volatile session due to speculation and uncertainly in the market. Throughout the day, the pairing moved between low 1.34’s and high 1.32’s on Interbank (IB). Later today, we have the release of the UK Mortgage approvals which is considered as a leading indicator of the UK Housing Market. This is forecasted to decline from last month’s figure of 59.029, and we might see some sterling weakness off the back of this release if it drops below 59.000 Furthermore, Monday will bring Manufacturing data to the market and considering this sector is the main DNA of the UK economy, if the reading drops below the benchmark of 50 it will be deemed as bearish for the UK and the sector will officially fall into contraction phase.

With a busier schedule on the cards for the struggling economy, Consumer Confidence achieved its consensus figure of -8.5% yesterday. Unfortunately, this continues the European trend of no positive data releases to uplift the economy and reflect in currency strength. Germany, who is the backbone of the European economy, witnessed a big drop in Unemployment Change to -8k from a previous -10k, whilst the unemployment rate came in line with expectations of 6.5% for the month of January. Furthermore, Consumer Price Index dropped off another 0.2% from the forecasted figure for Year on Year (YoY) and 0.7% for Month on Month (MoM). Unfortunately, this signals more signs of diminishing growth across the region. EUR/USD closed the London session at 1.1286 IB yesterday. We have more Consumer Price information later this morning covering the whole Eurozone which is forecasted to read at 0.6%. This sector is considered as a high impact data and we might see some volatility off the back of this release.

There was more positive news for the US Economy with the release of Initial and Continuing Jobless Claims yesterday. 265k was the figured announced for Initial Jobless claims, which is an improvement of 35k from last month’s 300k. This measures the number of people filing claims for state unemployment insurance. Whereas, Continuing Jobless Claims measures the number of individuals who are unemployed and are currently receiving unemployment benefits and this dropped down to a compelling 2.385 million which is 67k thousand less than in December 2014. GBP/USD traded very much within its ranges yesterday and the greenback made some ground in afternoon session to sustain a level between 1.5040 IB to 1.5080 IB. All eyes are focused on today’s GDP figures from the US which is forecasted to read at 3.3%. Today will prove the pace of how fast the US economy is growing and the information should set a benchmark for 2016.