Friday, 24 Jul 2009

Pound Drops on Worse than Expected GDP Release

The EUR advanced against the Dollar and Yen in early trading today after several better than expected economic data releases from the Euro-Zone. The data showed that European manufacturing and services contracted less than expected, as well as an improvement in German business confidence.

Further assistance to the EUR came from a continuing global rally in the stock markets, which increased risk appetite for higher yielding currencies and commodities. The Pound lost ground against the Dollar after a government report showed the British GDP shrank in the second quarter more than twice as much as economists expected. The EUR climbed 0.5% to $1.4214, extending its advance this week to 0.8%. The EUR traded 0.6% higher at 135.07 Yen, up 1.7% in the five days. The Yen traded little changed at 95.02 versus the Dollar. Crude Oil has also been benefiting from the resurgence in risk appetite with prices around $67.50 a barrel.

As the US market open traders should follow the release of the Revised UoM Consumer Sentiment at 13:55 GMT as well as well as Fed Chairman Ben Bernanke's testimony at 14:30 GMT as this will lead the Dollar's throughout the day.