UK Earnings surprises to the upside

Key Movers

Speaking to the Council of Foreign Relations in New York yesterday, ECB President Christine Lagarde echoed recent warnings from the IMF that a geopolitically fragmented world posed a risk to world growth, inflation, and to the dollar's dominance in world trade. This puts potential pressure on the US Dollar over this year, though short term, GBPUSD is struggling to break significant resistance at 1.25 and EURUSD at 1.10.  Today's Eurozone data calendar should see a modest pickup in German ZEW investor expectations and perhaps even a rare Eurozone trade surplus as lower gas prices finally feed through, though whether this will provide any necessary momentum to EURUSD to break above 1.10 is to be seen.

Chinese GDP ticked higher to 4.5% year-on-year, which would normally give commodity currencies a boost and push the US Dollar lower. However, markets were fairly unmoved as the 4.5% is coming from a low base and are low considering previous years. Also, breaking the release down shows industrial data came in soft, suggesting the manufacturing sector is struggling with low external demand in China.