UK economy up 22.2% in year to June
Sterling hasn’t reacted to the news that the UK economy grew by 4.8% in the three months to June and 22.2% in Q2 compared to the same period in 2020. Those numbers were in line with forecasts I guess but GBP growth in June alone was 1%. That’s a solid number. However, the UK’s trade deficit with the rest of the world grew to just shy of £12 billion in June and that was wider than forecast.
But that wasn’t the only data this morning; manufacturing production in June only grew by 0.2% but industrial production was up 0.7%; well above forecast. What’s more, UK business investment bounced back by 2.4% in Q2. That latter data has whipsawed in line with lockdowns and government responses over the past 18 months and it does tend to ebb and flow by 1% in either direction. So this is still a positive.
Enough data already? Well, the Pound is looking stoic in the face of such a plethora of information. GBPUSD is $1.3860, GBPEUR is still just above €1.18 and GBP is holding station against most other currencies.
Forecast for poor Eurozone industrial production
This morning will bring the Eurozone industrial production numbers. Poor recent German data suggests these will be… unattractive, shall we say. As that is the only meaningful data for traders to focus on, unless the numbers surprise to the upside, the Euro will be on the back foot today. The EURUSD rate is still in the low $1.17 area but we are seeing a degree of EUR buying to support it right now.
US weekly jobless claims are USD focus
This afternoon’s weekly jobless claims numbers from the US may alter that. The numbers of fresh unemployment claims have been falling since April 2020 but the pace of decline has slowed almost to a standstill around 370,000 to 380,000 in the last three months. Anything below there would be positive for the USD; especially after last week’s very solid July employment report. We will also see the producer price indices from America this afternoon, so the USD is likely to be lively.
NZD on PMI alert
As will the New Zealand Dollar overnight tonight. The NZ purchasing managers index is due for publication. This index has been trending higher, so there is room for NZD strength overnight. Beware and perhaps trade before that if you are a cautious NZD buyer.
And I am normally very jealous of those living along the coast of the Mediterranean but I have just seen the weather forecast and do not envy you those temperatures one bit. 47 and 48 degree highs are not to be meddled with. Please stay safe.