The Bank of England injected some volatility into the Pound yesterday after two contrasting comments by BoE officials. Firstly, Governor Mark Carney, pushed Sterling higher with his remarks in Scotland’s Herald newspaper, stating that “there are positive long-term prospects for the UK economy.” Following these comments, Deputy Governor Shafik, gave a speech in London yesterday. He said that more easing would probably be needed for the UK, following the shock Brexit vote. Overall, the Pound remained resilient, continuing to trade above a key psychological level against the Dollar.
Yesterday’s economic calendar was dominated by high tier data posted from the States. US Durable Goods registered an improved figure of 0%, whilst the core figure (which excludes the volatile transportation items) remained as expected at -0.4%. The decline in shipments indicates equipment investment may weigh on economic growth for a fourth straight quarter in the States. A small bout of Dollar weakness followed after the release of these figures.
The final reading for US Q2 GDP will be in the limelight, as this will no doubt give a good indication of whether the Fed will raise rates this year. If the final reading exceeds the expected 1.3% figure, the Dollar could be boosted as many will expect rates to be increased sooner rather than later. Apart from this, the main high tier data release will be comments from the central bank speakers in the afternoon.