Major Currency Pairs Analysis: Signs Of UK Economic Growth

In Germany, the Ifo institute releases its business-climate index on Thursday. Sulzer AG (SUN) plunged the most since October 2008 after lowering its forecast on full-year profitability. KPN jumped to its highest price in more than five months after agreeing to sell its German mobile-phone business to Telefonica SA. Vivendi climbed the most in eight weeks after saying it has held talks to sell a 53 percent stake in Maroc Telecom SA to Emirates Telecommunications Corp.The euro moved up.
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GBP/USD
U.K. mortgage approvals increased to 37,278 in June from a revised 36,290 the previous month, the British Bankers Association said in a report. Gross mortgage borrowing rose to 8.9 billion pounds in June from 8.7 billion pounds in May. U.K. economic growth doubled to 0.6 percent in the second quarter from the previous three months, The longer and stronger the signs of U.K. economic recovery the less likely it is we’ll see any resumption of quantitative easing and that’s been a key factor driving gilt yields down,” said John Wraith, a fixed-income strategist at Bank of America Corp. in London. Europe’s “outlook has become a bit more balanced. That particularly tends to coincide with slightly higher safe-haven yields,” he said.
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USD/JPY
The Japanese yen was slightly down against the US dollar, as USD/JPY broke above the 100 level, ending the week at 100.64. The upcoming week is very quiet, with only four events on the schedule. Here’s an outlook for the Japanese events and an updated technical analysis for USD/JPY. US Federal Reserve chair Bernard Bernanke testified before Congress last week, but there were no fireworks or drama, and the currency markets did not show much reaction. The US did release some strong employment and manufacturing numbers late in the week, and this gave a slight boost to the US dollar.
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USD/CAD
Canada’s dollar rallied to a one-month high after a report showed retail sales in May increased at the fastest pace in three years, fueling speculation the economy may be improving. Canada’s dollar increased 0.5 percent to C$1.0283 per U.S. dollar, the currency traded stronger than its 50-day moving average of C$1.0356 for a second day. Breaching moving averages signal to some traders a move has momentum to continue. Retail Sales increased in May to a record C$40.4 billion ($39.1 billion), Statistics Canada said in Ottawa. The gain in retail sales follows other signs of resilience in consumer spending such as stronger home construction, which counter warnings by policy makers about the threat posed by record household debt loads.
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