Euro Shrugs Greece, Sterling Drops on more Disapp Data
EUR extends gains into 1.4380s in the face of escalating Greek protests. German Consumer Climate improves and UK current account deficit came wider than expected. US consumer confidence hits 7-month lows.
German GFK consumer confidence survey for July improved slightly to 5.7 from 5.6 and marks a first advance after four consecutive months of losses. German June CPI is being released from various regions throughout the day with most parts seeing consumer inflation either 0.1% or slightly higher at 0.2%. Once compiled, the headline figure is due later today.
GBPUSD dropped to 1.5911 on lower rate hike expectation and fear of further QE after UK final Q1 GDP stayed unrevised at 0.5% and year over year figure was revised down from 1.8% to 1.6%. Current Account balance came out at GBP -9.7 bln, much wider than expected GBP -5.0 bln. The inflation report hearing in front of parliamentary committee explained worries that members of BoE share. Among the most dovish were comments that economy continues to be too weak to withdraw stimulus and expressed concerns that further asset purchases may be warranted. It seems that calls for rate increase that we have seen in the past few months were premature.
EURGBP is up 7 of the last 9 days, rising 2.9% testing the June 8 high, affirming that EURUSD strength is not solely a case of weak US fundamentals.
S&P CS composite index is due. The price of single family homes is expected to decrease by -3.9% from previous -3.6%. Should it come as expected, it would mark six months of negative results and more importantly 11 months of gradual back to back worsening.
US June Conference Boards consumer confidence fell to a 7-month low of 58.5 from Mays 61.7, due to poor labor market conditions and rising and income concerns. All components fell.
As the Greek parliament vote is getting closer, markets are likely to remain nervous. Choppy trading within a range is likely as players will hesitate to open new positions ahead of the decision.
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