Daily Currency Report

Friday saw the release of mixed economic data in the US. Elsewhere, despite stronger than expected UK industrial production data, the pound slipped for the fourth consecutive trading day.

GBP
Friday's market focus still leant towards the interest rate decisions made by the BoE. With CPI still above the CB's two per cent target and house price growth accelerating, there was little doubt that King would be able to convince other policy makers to take action. The release of the UK trade balance may provide clues as to the impact of a strong pound, as the deficit is anticipated to widen further.

USD
Non-Farm payroll figures showed that 132,000 jobs were created in June over an expected 120,000, although the market showed little reaction to this. The news that auto sales have collapsed to near post-Katrina lows suggest a fall in US consumer demand. If upcoming numbers confirm that notion the greenback could slip lower as any expectations for a rebound in growth will be postponed

EUR
Fundamental reports out of the euro zone recently have been remarkably dull, especially after the ECB's decision to leave rates steady and consistent hawkish. There won't be much in the way of economic data this week and the later final revision to domestic GDP numbers has little chance to move markets.

JPY
Expectations for an interest rate rise as soon as next month have been reinforced by data revealing that Japanese machinery orders rose at triple the pace expected. Two BoJ policy makers last week said that to keep borrowing costs as the lowest among major economies for too long could hurt economic growth in the long run.