29 Mar 2015

US GDP misses forecast

United States Dollar: Friday saw the final estimate of Q4 GDP from the States print 2.2% growth. The reading fell just short of the 2.4% expected however market reaction was fairly muted with cable barely moving in the immediate aftermath. The release showed business investment and exports increased however Federal government defence spending declined. The GDP figure supports a Fed rate hike in the second half of the year with September now looking the most likely month for Yellen and co. to finally pull the trigger. Cable currently trades at 1.4825 and with no top tier data from either the UK or America today it looks likely Greece will dominate the news.

We expect a range today in the GBP/USD rate of 1.4795 to 1.4920

Euro: Greece presented its creditors a list of reforms on Friday in an effort to secure further funding to avoid falling into the abyss. The markets expect Greece to run out of cash in weeks and the ongoing impasse will no doubt weigh on the Euro. Greece has submitted proposals that will combat tax evasion, raise duty on cigarettes and alcohol as well as plans to privatise Piraeus port. Creditors are currently going through the planned reforms to see if they deem them worthy of extra funding. The main risk-event this week will be Wednesdays CPI Flash Estimate from the Eurozone with current -0.3% expected to remain unchanged. Should the reading fall then expect the shared currency to be sold off. EUR/USD currently trades at 1.0825 with GBP/EUR at 1.37.

We expect a range today in the GBP/EUR rate of 1.3665 to 1.3790

Aussie and Kiwi Dollars: With a potential Grexit again in the news the Aussie and Kiwi have started the week on the back foot as risk aversion sees USD well bid. AUD/USD is back under 77 cents at .7689 and NZD/USD trades at .7516. Tonight sees the closely followed ANZ Business Confidence survey from New Zealand with tomorrow night’s Building Approvals the first top-tier release of the week from Australia. GBP/NZD is at 1.9715 with GBP/AUD at 1.9280.

We expect a range today in the GBP/AUD rate of 1.92 to 1.9345

We expect a range today in the GBP/NZD rate of 1.9675 to 1.9790

Data Releases

AUD: No data

EUR: German Prelim CPI m/m

GBP: Net Lending to Individuals m/m

NZD: No data

USD: Core PCE Price Index m/m; Personal Spending m/m; Pending Home Sales m/m

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