The pound is mixed this morning, gaining against the euro, but consolidating against the US dollar ahead of the second estimate of third quarter GDP is released today. The Q3 GDP gauge is projected to remain unrevised at 0.5% on both quarterly and yearly basis. The second release of the GDP data will provide more insights on expenditure breakdown. Also scheduled for today is the CBI industrial trends data for November, with expectations for the figure to deteriorate further to –19 after dropping to –18 in the previous reading. Separately, Bank of England Minutes revealed yesterday that the policymakers were unanimous in their decision to leave the benchmark rate at 0.5% and maintain the target for asset purchase at 275 billion pounds. The central bank cut its growth and inflation forecasts last week and said yesterday that the threat from the euro-area debt crisis had increased and that underlying growth was probably weaker that the 0.5%.
The euro gained against most of its major rivals during the early morning session after German growth figures came in line with expectations and business confidence surprised on the upside. The Ifo Business Climate for November increased to 106.6 from 106.4 in October, while analysts expected decline to 105.2. The single currency was undermined yesterday after Fitch Ratings reported that France risks losing its top credit rating in the events of further economic shocks. In addition, German bond auction yesterday raised only two thirds of target as investors’ worry that European monetary union could collapse.
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