Markets became cautious ahead of the U.S. GDP data on Friday and pushed the Dollar higher as positions set earlier in the week were unwound. Q2 U.S. GDP came out at 2.4% versus an expectation of 2.5% and triggered risk aversion amongst investors who took to buying the Greenback. The data was the strongest indicator so far that economic recovery in the United States was slowing and supported comments from Fed Chairman Bernanke who said the Fed was ready to initiate further stimulus if needed. Calm returned to the markets after the release of the Chicago PMI and University of Michigan sentiment index, both beating the consensus forecast.
The Pound continues to appreciate this morning against the Dollar, pushed higher by a surge in equity markets although ranges versus the Euro remains fixed. Markets await the release of German, U.K. and U.S. PMI manufacturing data today, the data is expected to come out neutral and as such equity markets could continue to direct currency trade.
Live IB rates at 9.31 am UK
GBP – EURO 1.208
GBP - USD 1.579
GBP- AUD 1.731
EURO - USD 1.307
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