The pound is mixed this morning, gaining against the broadly weaker dollar, but consolidating against the euro before public sector data show that UK budget gap widened in May. Public finance data for May are published at 9:30, with the expectations for the Public Sector Net Borrowing to have widened to 17 billion pounds. The expectations for the public sector net cash requirements is expected to reach 6.6 billion pounds in May after reaching 3.3 billion in the prior reading. Also scheduled for today is the CBI Industrial Trends Survey, with the expectations for the headline total orders balance to weaken slightly in June to –5, from –2 previously. Separately, dovish MPC member Paul Fisher is due to give a speech this morning in London. Expect for the pound to remain under pressure as public finance data is expected to weight on the currency.
The euro rose across the board after European leaders reassured investors that Greek default on its debt can be avoided. Luxembourg’s Finance Minister Jean Claude Juncker said Greek PM George Papandreu had assured him the government would everything to ensure financial aid before a no-confidence vote today. Greece needs parliamentary approval of a 78 billion euro package of budget cuts to ensure the payment of a fifth loan under last year’s 110 billion euro bailout. Looking ahead to today, Germany’s ZEW Survey of Investor confidence headlines the economic calendar, with the expectations for the sentiment to decline for the first time in eight months. Expect the euro to remain supported against its major rivals should we see the Greek PM George Papandreu passes the parliament vote.
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