Search ForexCrunch

Yesterday’s session was hardly lit up by fireworks but the main mover once again was sterling which suffered further declines across the board. EURGBP edged higher to recapture 0.7900 and is now not far off a retest of 0.8000 and GBPUSD fell even further below the 1.5700 level. This morning they sit at 0.7940 and 1.5675 respectively.

Inflation data across the Eurozone was mixed with some releases, namely France and Spain, surprising to the upside. Already this morning we’ve seen French and German GDP data come in slightly better than expected and these all show tentative signs that possibly the worst is over for the Eurozone. We’ve seen similar good pieces of data in the past few weeks with an increase in money supply and Europe’s banks seem to have weathered the stress test storms well. Even EURUSD is indicating this as it crept higher again yesterday and is at 1.2445 this morning, which must be making a few bears of the euro a little nervous. A test for EURUSD shortly will be the release of Eurozone GDP at 10.00 GMT, expected to come in at 0.7% Y/Y and 0.1% Q/Q.

Later in the day we see the US join the party with retail sales at 13.30 and Michigan Consumer Sentiment data at 14.55 both of which have the potential to provide a reaction from the dollar which so far this week has tread water.

Further reading:

Market Movers Episode #24: Diving into Australia, US jobs analysis, punished pound and collapsing yen

German GDP Analysis: Good news for Germany, bad news for Europe