GBPUSD Unchanged Despite Better Data
The greenback fell across the board during the London session but was able to recover a small part of its losses against some majors. USDJPY fell to 77.96 and USDCAD declined to 0.9723. European equity indices are losing about 0.4%.
The common currency rose sharply from 1.2758 to 1.2818 after the German constitutional court announced that they will not delay tomorrow's ESM decision despite new challenges. Other factors that contributed to the rise were comments from IMF director Min Zhu who said that he strongly supports the ECB bond buying program and also comments from the Finnish PM Jyrki Katainen who confirmed that all parties in Finland want to remain in the Eurozone. EURUSD continues to trade right below the 1.28 mark.
UK trade balance was the sole report during the London session and the deficit in July narrowed to GBP 7.1 bln from June's GBP 10.1 bln which is the best result in 17 months. The better than expected result is attributed to 11% rise in exports to non EU countries which is the fastest growth since record inception in 1998. GBPUSD reaction was muted and it continues to trade around the 1.6020.
The US session will start at 8:30 am ET with trade deficit that is expected to widen marginally to USD 44.2 bln in July from previous USD 42.9 bln. IBD/TIPP economic optimism index due at 10:00 am is anticipated to improve in September to 47.3 from 45.6.
Canadian data includes August housing starts that are due at 8:15 am ET and are seen lower at 201K from previous 208.5K followed by July trade deficit that is seen slightly narrower at CAD 1.4 bln from previous CAD 1.81 bln.
GBP could react to MPC member David Miles who speaks at 1:15 pm ET at the Scottish Annual Lecture in Edinburgh.
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