The main economic news during today’s European session was the revised UK GDP figure for the third quarter which came in line with expectations. It increased at a 0.7% pace quarter-on-quarter and at 3.0% year-on-year. Private consumption and government spending was stronger-than-expected but investment and trade proved softer-than-expected.
Sterling fell on the news, but then recovered back to session highs, rising from 1.5677 to 1.5804. A weaker dollar due to soft US data today helped support the pound.
The euro came under pressure after comments by ECB Vice President Vitor Constancio who suggested that should current ECB measures prove insufficient, then in the first quarter of 2015 the central bank would consider buying sovereign bonds. The euro touched a session low of 1.2442 before bouncing to 1.2515 thanks to a broadly weaker dollar. The focus from here will be ECB Chief Mario Draghi’s speech on Thursday, followed by Friday’s release of the flash Eurozone CPI data.
The dollar lost momentum against the yen and has fallen back below the 118.00 level. After rallying to a high of 118.56 on the back of strong US third quarter growth numbers that were revised higher on Tuesday, the dollar gave up some gains today.
A string of somewhat less upbeat US data followed from the GDP data, pushing the dollar to a low of 117.48. The US economic calendar was full today due to the Thanksgiving holiday on Thursday. So data that was usually released on Thursday was released today. US pending home sales unexpectedly fell in October, dropping to their lowest level in four months, dipping 1.1% despite forecasts for a 0.5% increase. Initial jobless claims rose to 313,000 in the week ending November 22 to the highest level since September. Durable goods orders fell for a second straight month in October.