Euro rebounds in lacklustre summer trading
22/Jul/2015 • Currency Updates•
Another lacklustre day in terms of macroeconomic news or policy releases. As markets await the release of the Bank of England minutes, they were content to let Sterling float in line with the US Dollar. The Euro’s strong rally against the Greenback meant Sterling lost almost 1% against the common currency.
This morning the Bank of England will be releasing the minutes from its July monetary policy meeting, including the all-important vote on interest rates. Despite recent hawkish words from Bank of England Governor Mark Carney, the vote is expected to remain unanimous again, although this is likely to change at next month’s meeting as the UK moves closer towards its first interest rate hike since the financial crisis.
Another day without relevant news saw the Euro attempt a bounce from the 1.08 level. This was mostly successful, perhaps driven by the mostly resolved Greek crisis.
Today will be a mostly quiet day as far as economic indicator data is concerned in the Eurozone. We will, however, see the announcement of retail sales and industrial output in Italy this morning.
Mildly positive news from the third-tier Redbook sales indicator was not enough to push the Dollar higher amid a general relief rally in the Euro. Dollar losses of about 1% against most major currencies (except Sterling) must be understood in the context of the very sharp rally experienced by the Greenback lately, and we do not think they signal any significant change in trend.
Focus in the US this afternoon will be on housing data. This will include the announcement of last week’s mortgage applications, existing homes sales, and the housing price index for May.