With a mixed day of data out of the UK yesterday, ultimately not amounting to much, GBP was more driven by events in the US, namely the release of poor export data which resulted in positivity for the pound - closing the day against the dollar at 1.5234. The pound didn’t do as well against the euro, however, as it ended Tuesday slightly down at 1.3511. Of the minimal data today, UK manufacturing is expected to come in negatively month-on-month as we see continued weakness in the wake of a global slowdown. Tomorrow’s Monetary Policy Committee meeting should have some interesting points to take note of regarding this.
On the European mainland, EUR had a tough day on the back of German factory orders data which came in at -1.8% (2.3% worse than expected). Much of the fall has been attributed to a fall in domestic demand (and a possible drop in demand across Europe in general). China’s slowdown has been seen to be a big cause of Europe’s GDP woes – a result of which could be the increasing of QE to €2.4 trillion.
The US was light on data yesterday apart from a lower-than-expected a trade balance figure for August. Again today, there isn’t much data to work with – all eyes on are the FOMC’s meeting minutes which will be released tomorrow where more rate speculation is due to emerge.
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