The pound is mixed this morning, consolidating against the broadly stronger dollar, but gaining against the euro on worries European officials are having hard time to resolve the debt crisis. Sterling was also supported against most of its major rivals during Asian session as investors perceive the UK currency as a “safe haven” given the current fiscal picture in developed economies. There are no economic releases or policy speeches scheduled for today. Looking to the weak ahead, GfK Consumer Confidance survey headline the economic calendar, with the expectations for the figures to slide further to –33 in September. Also scheduled for this week is the CBI distributive sales survey on Tuesday, while on Thursday we will see the publication of money and credit data for August. However, expect for the pound to remain driven by the events on the continent as debt crisis in the single region deepens.
The euro dropped across the board during the overnight trade, reaching a ten year low against the yen as Greece awaits decision on its next round of emergency loans. Eurozone policymakers will not be in a position to decide on the next round of rescue for Greece when they meet on October 3 as the report from the IMF , ECB and European Commission has been delayed. The 440 billion euro from the EFSF (European Financial Stability Facility) which were in place since July 21 meeting, will take effect only when all euro area countries have ratified them. Looking to the economic docket for the Eurozone today, German business sentiment headlines the calendar, with the expectations for the September figures to have decreased to 106.5 from 108.7 in previous month. Turning to the weak ahead, German unemployment figures and Eurozone Consumer Confidence data are all published on Thursday. Expect for the single currency to remain under pressure against its peers as Greece is at the verge of the unregulated default and Eurozone’s economic recovery is faltering.
The dollar is higher against most of its rivals as investors around the globe run for safety of the US currency while Eurozone’s debt crisis intensifies and value of the global stocks have been whipped out during market turmoil. However, the greenback will be put to the test this week before the third reading of gross domestic product (GDP) for the second quarter is released on Thursday. The gauge is projected to be revised upwards from 1.0% to 1.2%, reflecting increased levels of construction spending. Also scheduled for this week will be the release of S&P/CaseShiller Home Price index for July, with the expectations for the figures to rise 0.5% from June. Finally, Durable goods orders for August are expected to provide some downward pressure on Wednesday, with overall reading expected to have decreased by -0.5% in August.
Comments