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22 Dec 2015

GBP/USD licks its wounds as markets await US Durable Goods

United States Dollar: Markets have been fairly subdued again over the last 24 hours. GBP/USD drifted lower during the morning on Tuesday and then took a further knock following the release of slightly better than expected Final GDP from the States. This printed at 2.0% vs. expectations for 1.9%. US Home Sales printed a little weaker than expected a bit later on in the day but by then the damage had already been done in GBP/USD. The pair fell to a low of 1.4805 yesterday but has recovered overnight to open this morning at 1.4860. Although the holiday season is fast approaching it might not be completely quiet today with UK Current Account data due at 9:30 and Durable Goods Orders from the US.

We expect a range today in the GBP/USD rate of 1.4800 to 1.5000

Euro: EUR/USD pushed slowly higher throughout the day yesterday despite the release of the better than expected US GDP data on Tuesday. It reached a high of 1.0985 yesterday, helped along the way by solid bids in EUR/GBP. These long positions were unwound through the night and GBP/EUR has recovered to open this morning at 1.3590. EUR/USD has fallen back too and trades at 1.0935 currently.

We expect a range today in the GBP/EUR rate of 1.3600 to 1.3710

Aussie and Kiwi Dollars: It’s been very quiet as far as AUD and NZD are concerned. The NZ trade deficit for November was shown to have narrowed by more than expected which was mildly supportive of the kiwi. Asian equities were also fairly positive last night too which helped. AUD/USD and NZD/USD are little changed from yesterday’s opening levels however and open this morning at .7245 and .6825 respectively.

We expect a range today in the GBP/AUD rate of 2.0490 to 2.0700

We expect a range today in the GBP/NZD rate of 2.1600 to 2.1920

Data Releases

AUD: CB Leading Index m/m

EUR: French Consumer Spending m/m

GBP: Current Account, Final GDP q/q, Revised Business Investment q/q

NZD: No data

USD: Core Durable Goods Orders m/m, Core PCE Price Index m/m, Personal Income m/m, New Home Sales, Revised UoM Consumer Sentiment, Revised UoM Inflation Expectations

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