#EUR and #NZD have good days while UK #GDP holds key to #GBP today – 28th July 2015

It was the Euro yesterday that had a good day after all three IFO measures of German business confidence surprised investors by coming in ahead of forecast and better than the previous month. Despite the positive figures, the Euro had already strengthened by a cent in the hour prior to their publication. Conspiracy theorists suspected a leak.

Whether there was a leak or not, the Euro gained a net half-cent from Sterling and it added three quarters of a US cent. Elsewhere the NZ Dollar continued it’s rebound from the 6-year lows against Sterling on 16th July at NZD/ GBP 0.4167 (GBP/ NZD 2.40) as it has strengthened by about 2.5% against Sterling since. That carried on yesterday as the Kiwi managed to take a further two cents against Sterling.

There was no reaction yesterday afternoon to stronger-than-expected US durable goods orders. The lack of movement suggests investors are holding back from the US Dollar until they have seen the Federal Reserve policy statement which comes out on Wednesday evening.

Of today’s data, UK GDP will have the greatest impact on Sterling. In the 18 months to the end of March 2015 the UK economy expanded by an average of 0.7% per quarter. The 0.4% growth reported for Q1 2015 was a disappointment and analysts expect a revival to 0.7% quarterly growth in Q2. If not, Sterling will likely re-treat.