Daily Foreign Exchange Market Update

The Pound saw losses against the Euro and the US Dollar in the foreign exchange market yesterday. The GBPEUR rate opened the day at 1.2355 but moved to a daily high of 1.2362 an hour after the open; it fluctuated throughout the day, dropping to a daily low of 1.2331 before closing the day out at 1.2350. The GBPUSD rate opened at 1.6027, hitting a daily high of 1.6034 mid-morning, before falling to 1.5996 in the afternoon and closing out the day at 1.6013. There was no data released form the UK yesterday but there was some big news as the new Governor of the Bank of England was announced. The Chancellor of the Exchequer, George Osborne, announced that the new Governor will be Canadian, Mark Carney who is currently Governor of the Bank of Canada and Chairman of the Financial Stability Board. Many analysts believe it is a sound choice as he has experience as a central banker and Canada has had no big banking crisis like the UK has. Today has already seen the UK GDP revised figure come out at 1.0%, so no change.

The Euro saw gains versus the Pound but losses against the US Dollar during yesterday’s market session. The EURUSD rate opened the day at 1.2972 and dropped to a daily low shortly after to reach 1.2947; it then quickly peaked up to 1.2981 before lunch before it closed the day out at 1.2966. The major news from the Euro-zone yesterday was the Euro-group meeting where for the third time this month leaders have tried to clear an aid payment to Greece. There will be no data from the Euro-zone today.

Yesterday we saw the US Dollar gain against the Pound and the Euro in the foreign exchange market even though there was no data released from the US. Today will see durable goods orders for October be released with the figure set to fall by 1.0%. This is much lower than the previous figure of 9.9% for September showing a lower amount of confidence in the US market however Consumer Confidence will also be released and is set to rise from 72.2 to 73.0.

This Daily Market Update is brought to you by The Market Team @ KBRFX – Exchange Rate, Currency Conversion & Foreign Currency Transfer specialists.

Daily Foreign Exchange Market Update

The Pound saw itself weaken against the Euro and the US Dollar in the foreign exchange market yesterday. The GBPEUR rate opened at 1.2422, a daily high, and lost strength across the day before closing out at a daily low of 1.2374. The GBPUSD rate opened at 1.5964 and quickly gained strength, hitting a daily high of 1.5979 early morning. Throughout the rest of the day it weakened before closing out at a daily low of 1.5930. There was no data released from the UK yesterday and none will come out today.

The Euro gained strength against both the Euro and the US Dollar during yesterday’s market session. The EURUSD rate opened the day at a daily low of 1.2851 before hitting a daily high of 1.2899 at midday, closing the day out at 1.2874. Yesterday we saw German, French and Euro-zone PMI all come out better than expected, some good news for once. Today German GDP figures have been released with the year-on-year and quarter-on-quarter figures coming out in line with predictions, 0.4% and 0.2% respectively. Today there is also a Euro-zone economic summit where heads of state will meet and discuss future plans for Spain and Greece.

The US Dollar saw some gains against the Pound but weakened against the Euro in the foreign exchange market yesterday. There was no data from the US yesterday as it was Thanksgiving and none will be released today

This Daily Market Update is brought to you by The Market Team @ KBRFX – Exchange Rate, Currency Conversion & Foreign Currency Transfer specialists.

Daily Foreign Exchange Market Update

The main news yesterday was that of the Pound falling to a 4 month low against the Euro in the foreign exchange market showing it is not a good time to be buying Euros. The GBPEUR rate opened at 1.2281, gaining strength during the first half of the day to reach a daily high of 1.2310. It then fell throughout the rest of the day, reaching a daily low of 1.2247 an hour before the close of trade, closing slightly higher at 1.2269. The Pound also lost ground against the US Dollar during yesterday’s market session. The GBPUSD rate opened at 1.6036, peaking early, a few hours into trading to reach 1.6053, before falling throughout the rest of the day to close out at a daily low of 1.6026. There was no data released from the UK yesterday and only one piece will be released today. BBA loans for house purchases in September will come out, the number of loans approved for house purchases in the month with the figure set to increase from 30,533 to 30,840, showing an increase in confidence which is healthy for the economy. However, Mervyn King, the Governor of the Bank of England will speak at the Chamber of Commerce today in Cardiff. As Governor of the Bank of England he has more influence over the Sterling than anyone else so analysts will scrutinize the speech to try and predict how the Pound will fare against foreign currencies.

Yesterday saw the Euro gain against the Pound and the US Dollar during the market session with the EURUSD rate opening at 1.3057 and closing at 1.3062. It fluctuated throughout the day, falling early morning to a daily low of 1.3025 but peaking an hour before the close of trade at 1.3083. The only data to be released from the eurozone yesterday was the government debt/GDP ratio for 2011. This ratio shows the amount of debt a eurozone country’s government has compared to the GDP of that country. At the end of 2010 the ratio was 87.2% and at the end of 2011 it increased slightly to 87.3%, not a great deal of difference, still a very high figure.

Today, eurozone consumer confidence will be released, data collected from a range of surveys on various topics including personal finance, the job market and future expectations. The previous figure was -25.9 and today’s figure is set to come out at -25.8, slightly better but still showing a very low level of confidence within the eurozone area.

The US Dollar gained strength against the Pound but weakened against the Euro during yesterday’s foreign exchange market session. This came off the back of no data being released from the US yesterday, the only news being the third and final US presidential debate, the election being dubbed the economic election where the main topic of conversation was foreign policy including defence spending and the trade partnership with China. No data will be released from the US today.

This Daily Market Update is brought to you by The Market Team @ KBRFX – Exchange Rate, Currency Conversion & Foreign Currency Transfer specialists.

Foreign Exchange Daily Market Update 26/07/11

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The Pound moved slightly lower against the Euro and the US Dollar in the foreign exchange market yesterday. The GBP/EUR rate dropped from the morning’s open of 1.1346 to trade at 1.1340 by the market’s close. The GBP/USD exchange rate also fell, but only marginally, from 1.6292 down to 1.6281 by the end of the day. It was a fairly quiet day in terms of economic data across the world’s major economies, with the only figure of note out of the UK being BBA loans for house purchases, which showed an increase for the month of June; up from 30,580 to 31,747.
Today will see the market focus on 2nd quarter GDP figures form the UK. Analysts are almost certain in their predictions to see the growth rate fall, both annually, and quarterly, but the margin of this will be what influences any movement on the Pound. The figure, which is due out at 09:30 could see the Pound weaken if the growth rate falls drastically, as along with the base interest rate, economies growth in a country is one of the main draws to an influx of investor’s funds into its currency.

The Euro did move up a touch against the Pound, but fell slightly against the US Dollar yesterday. The EUR/USD rate fell marginally, from 1.4359 down to 1.4352 throughout the day, after staging a small rally during the early afternoon. There was no key economic data released from Europe yesterday to influence the currency exchange market further; but there was news of Greece having its credit rating cut once more; so despite a re-structuring package being agreed, ratings agencies see the nation as almost certain to default on its own bond repayments.

This morning has already seen the German GfK consumer confidence report show a drop in positive sentiment for the month of July, with the index falling from 5.5 to 5.4; going against market forecasts for a rise in the reading. This shows that despite Germany being one of the strongest member states in the EU, that the current debt contagion and default woes, combined with the immense amount of money being pumped into restructuring plans by the German government, the sentiment amongst the general public is worsening.

The US Dollar did make some small moves against the Euro and the Pound yesterday, but any gains were short lived as the currency started weakening back off this morning. The US economy is still facing the possibility of a default, and also a credit rating cut; which does have the potential to affect global financial markets. The currency which is often viewed as a ‘safe-haven’ in times of economic trouble, is now starting to raise concerns amongst investors, who are worried about the value of the Dollar and US treasuries should the nation have it’s rating slashed.

Today will see the release of new home sales figures for June, which are expected to show a small rise, which would be a positive boost for what is still quite a weak US housing market. The most notable data release though will be consumer confidence figures, which are set to report at 15:00, with the market forecast for a fall in the levels; which could prove to be negative for the US Dollar. Consumer confidence is usually linked to consumer spending, so a drop in the levels could tie-in to a possible slowdown in retail sales and consumer spending, which would not be positive for the overall economic picture in the US.

Mike Hood
KBRFX

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Foreign Exchange Daily Market Update 20/07/11

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The Pound made small gains against both the Euro and the US Dollar in the foreign exchange market yesterday. The GBP/EUR rate moved up from 1.1388 at the morning’s open to trade at 1.1395 by the close. The GBP/USD exchange rate also picked up, from 1.6110 to 1.6133 throughout the day. There was no economic data released from the UK to support any movements in the currency market; but there was a lot of media focus on the live-broadcast Parliamentary enquiry into the News Corp hacking scandal; with James Murdoch and Rupert Murdoch being quizzed by MP’s on their knowledge and involvement in alleged criminal activities. The market may be influenced by any unexpected revelations to come out of these events, as the UK media has placed strong political links to the case.

Today will see the markets attention turn to the release of the Bank of England’s minutes from their last policy meeting. The Pound could well suffer in the foreign exchange market if it is showed that the BoE are taking a more dovish stance to policy, with numerous market experts indicating that the central bank has little option but to keep both the base interest rate and asset purchase target on hold, for fear of any detrimental effect to the UK economy from any changes. A rise in interest rates could prove extremely damaging to the UK housing market, whilst an increase in asset purchasing could trigger further inflationary pressures.

The Euro did slip slightly against the Pound, but made a small advance against the Euro yesterday, with the EUR/USD rate moving up from 1.4146 at the market open to trade at 1.4158 by the day’s close. The economic data released from Europe yesterday showed that German ZEW economic sentiment levels fell dramatically in July, from the previous reading of -9.0, down to -15.1 amid expectations for only a slight fall to -12.5. This could well be attributed to large consumer unrest in Germany, where the voting public have been more vocal in their disapproval of the constant German financial help that is being directed to weaker EU states such as Greece and Portugal.

The European economic docket today has already seen the release of annual German producer prices for June; with the reading falling from 6.1% down to 5.6%. This afternoon will see the release of Euro-zone consumer confidence figures for July; with the market forecast for a fall in confidence for July; which would be detrimental for the single-currency’ but is widely-expected due to the worsening debt situation across a large proportion of the Euro-zone.

The US Dollar did lose some ground in the currency exchange market yesterday; with the House of Representatives still struggling to find a solution to increase the US’s debt ceiling to prevent a default on debt repayments come the start of August. The market is worried by the increasing possibility that one of the world’s largest economies could default on its debt obligations; and it would send shockwaves through the world’s financial markets. There was some slightly positive data from the US yesterday in regards to the housing market, with building permits showing a good increase for the month of June, up from 609,000 to 624,000, alongside housing starts picking up from 549,000 to 629,000.

Today will also see the US economic docket focus on housing, with existing home sales figures set to report. The market is expecting a pick up in the figure, from the previous reading of 4.81 million sales to 4.90 million. This would be a good sign for the US housing market, but may not be significant enough data to make a big move on the currency market, barring any extreme surprises in the reading.

Mike Hood
KBRFX

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Foreign Exchange Daily Market Update 13/07/11

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The Pound finished the day slightly lower against the Euro, but reversed the pattern of the past few days to gain some ground back against the US Dollar in the foreign exchange market. The GBP/EUR rate dropped from the morning’s open at 1.1425 to finish the day trading at 1.1374, still good levels for people buying Euros; considering that much of the past 2 weeks was spent with the exchange rate hovering closer to 1.10. The GBP/USD exchange rate went against the current trend, to gain from the morning’s level of 1.5819 to trade up at 1.5935 by the day’s close, welcome news for people buying Dollars who would prefer to see the rate trading over 1.60.

The economic data release form the UK yesterday wasn’t hugely positive though. CPI figures showed a drop in the inflation rate, annually, from 4.5% down to 4.2%; which puts a dampener on any chances of a rate-hike from the Bank of England, and re-affirms policy-maker’s stance that high levels of price growth are temporary, and will ease over time. Retails price index figures showed no increase, with the figure holding at 235.2 amid forecasts for a rise to 235.8. The UK’s trade balance also showed a worse situation than expected, with the negative deficit increasing to -£8.478million from -£7.643million; reinforcing the UK’s huge over-reliance on imported goods.

This morning has already seen some fairly important economic data released from the UK, and it is all labour-market focused. The ILO unemployment rate figures have been released, with the rate staying unchanged at 7.7%. The claimant count also remained unchanged at 4.7% for the month of June, but a slight negative twist saw the amount of jobless claims increase to 24,500 in June, up from 22,500 the previous month. This was a big surprise to the market as forecasts were calling for the number of jobless claims to drop to around 15,000, and is a blow to what is still quite a weak labour market in the UK.

The Euro managed to gain some ground back against the Pound, and also the US Dollar yesterday. The EUR/USD rate pushed back up throughout the day from 1.3845 in the morning, to 1.4016 by the market close. There was some positive news from the European calendar yesterday, with French CPI showing an annual increase, up from 2.2% to 2.3%, showing that there is a small amount of price growth despite the European base-rate being raised twice this year already. German CPI however, fell, with the EU harmonised figure showing a drop from 2.4% to 2.3%.

There is not much data scheduled for release from Europe today, but we will see shortly Euro-zone industrial production figures, with the market expecting to see slight increase in the monthly level, but a small downturn in the annual production rate. This could well affect the currency exchange market, as Europe and particularly Germany relies heavily on industry, and any slowdown in this sector could be detrimental to overall economic growth.

The US Dollar weakened off across the board yesterday, with the market focusing on the release of the Federal Reserve’s minutes from their last policy-meeting, which showed above all, indecision among policy makers on how to proceed. Some policy-makers argue that if the unemployment market stays weak, the Fed should consider expanding the money supply through quantitative easing – or buying Treasury bonds. However, some of the Fed’s policy-makers argued that the current situation of moderate inflation, along with high unemployment suggests there may be more fundamental changes at work in the economy, with workers shifting sectors and losing skills because of long periods of unemployment. Those structural changes in the economy, these officials argued, “May have temporarily reduced the economy’s level of potential output,” the minutes said. If that’s the case, they added, the Fed may need to start pulling money out of the economy sooner than markets now anticipate. Along with the US’s negative trade balance increasing from -$43.6billion up to -$50.2billion, the currency has suffered in the market.

Today will see the foreign exchange market focus again on rhetoric, with Fed chairman Ben Bernanke set to make his semi-annual report to Congress, and will be sure to face questions on future policy, and the current debt-ceiling issue, as well as the market looking to the chairman’s expectations and assessment of the overall economic picture in the US.

Mike Hood
KBRFX

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Foreign Exchange Daily Market Update 22/06/11

The Pound ended up losing ground against the Euro, but making a small gain against the US Dollar through the course of yesterday. The GBP/EUR rate slipped down to 1.1269 from the mornings open close to 1.13, with the GBP/USD exchange rate picking up a touch from 1.6227 to 1.6238 by the end of the day. There wasn’t a great deal of data released from the UK, but the figures that were published showed that Public Sector finances increased in the month of May, from 6.6 billion pounds up to 11.1 billion pounds. But contrary to this, Public Sector Net Borrowing dropped from 16.5 billion pounds to 15.2 billion pounds, showing that the UK Government has increased the amount of funds it diverts into the public sector; but is finding this capital from non-borrowed sources.

The major data event for the UK today will be the release of the Bank of England’s minutes from their last policy meeting. Whilst there was no change in either the base rate, or asset purchase target at the last meeting; the minutes will be studied closely for any signs of a shift in rhetoric; and the all important voting numbers, which may be indicative of future policy. The foreign exchange market is likely to take direction from any surprises within the minutes.

The Euro managed to gain some ground against the Pound and the US Dollar yesterday, despite the ongoing Greek bailout situation. With finance ministers pushing hard for a solution, the market may be viewing a possible resolution as a sign of strength within the European community, and consequently the GBP/EUR rate is still fairly low, making it tougher for UK consumers buying Euros. The economic docket from Europe yesterday was also fairly disappointing, with the ZEW economic surveys showing that sentiment in Germany and the Euro-zone overall fell drastically.

Today will see the release of the Euro-zone industrial new orders figures from April, and also Euro-zone consumer confidence figures for June. The currency could strengthen if the figures show positive gains, but any push is more likely to come from the bigger ongoing risk-event of Greece’s sovereign debt problems and the potential contagion of this to other nations such as Ireland, Spain and Portugal.

The Dollar did fall slightly against the Euro and the Pound in the currency exchange market yesterday, despite some fairly positive economic figures. Existing home sales figures showed an increase for the month of May, with sales figures up to 4.81 million from the previous month’s level of 4.80 million. This took the market growth percentage up from -5.00% to -3.80%, a sign that the housing market is gradually improving.

Today’s US economic docket will focus solely on the Federal Reserve’s interest rate decision, and the accompanying press conference. Exactly as the market will focus on the Bank of England’s minutes release, any shifts in rhetoric or policy stance will affect the currency; with a positive rhetoric from the Fed having the potential to push the GBP/USD exchange rate back down, making it more expensive for UK consumer buying dollars.

Mike Hood
KBRFX

Foreign Exchange Daily Market Update 21/06/11

The Pound closed yesterday lower against the Euro, but slightly higher against the US Dollar in the foreign exchange market. The GBP/EUR rate opened at 1.1354, but closed trading just under 1.1315; the GBP/USD rate picking up to 1.6206 from the day’s open at 1.6128, a good gain for the Pound, making it slightly more attractive for UK consumers who are buying Dollars. There were no economic data releases from the UK yesterday, so the currency was left open to market movements based on sentiment and news from other world economies.

Today’s UK economic docket will focus on public sector finances; with the monthly figures for public sector net borrowing and public finances set for release. The market will watch closely to see if the UK Government is sticking to it’s pledge to make deep cuts to reduce the overall debt level, but there could well be a knock-on effect that harsh austerity measures will affect overall economic growth.

The Euro managed to regain some strength against the Pound yesterday, even in the face of disappointing economic data. Yesterday saw the release of German producer price figures for May, and with a sharp drop in the month-on-month figure, from 1.0% growth to 0.0%, and also the annual level falling from 6.4% to 6.1%, it would have made sense for the Euro to weaken slightly, but the result was completely the reverse. It may well be that the currency is finding strength from the strong rhetoric from the EU, that it will reach a suitable solution for Greece, with European Commission President José Manuel Barroso insisting that Greece will ‘never’ be allowed to go bankrupt. Barosso drew parallels with the global financial crisis that started with US banking giant Lehman Brothers going bust; and stated ‘’A country going bankrupt is much more delicate than a bank that would affect all EU members. No, we should never allow a country to go bankrupt.’’ Whilst the Euro continues to find strength, it will make it more expensive for UK consumers who are buying Euros.

Today’s economic docket from Europe contains the highly influential ZEW Economic Sentiment surveys for Germany and the overall Euro-zone. The ZEW survey conveys the opinions of select financial experts on the direction of inflation, interest rates, exchange rates, and the stock market over the next six months, and any shock result in its findings does have the potential to strengthen or weaken the European currency. EU finance ministers are also still working hard to try and produce solution to Greece’s debt woes, and the currency exchange market may take direction from the outcome of this.

The US Dollar weakened against the Pound throughout yesterday, and with no economic data to support the Greenback it also fell sharply against the Euro. The EUR/USD rate peaked at 1.4314, up from the morning’s open at 1.4203.

The economic docket from the US today is comprised solely of housing data; with existing home sales figures for May set for release. Sales are expected to drop, both annually and month-on-month, and in a market that is still fairly weak in the US, it is not a positive sign for the overall economic picture, and could weaken the Dollar slightly on release.

Mike Hood
KBRFX

Foreign Exchange Daily Market Update 17/06/11

The Pound opened and closed almost unchanged against both the Euro and the US Dollar in the foreign exchange market yesterday. Despite a slight fall in the middle of the day, GBP/USD opened at 1.6142, and closed around 1.6128, with GBP/EUR opening just shy of 1.1420 and closing at levels of 1.1396. There was only one key set of figures on the UK’s economic docket yesterday, and that was Retail Sales result for May. The core result was a drop, both month-on-month and annually; falling from 1.1% to -1.6%, and from 2.3% to 0.00% respectively. This can be viewed as a negative sign for the UK, as it shows a drop in consumer demand, and consequently, a potential slowing in economic growth.

Turning to today’s UK economic docket, there are no figures set for release; which leaves the Pound open to movement in the currency exchange market based on news events and data from the world’s other major economies.

The Euro held firm against the Pound and The US Dollar yesterday, albeit after a heavy drop against the Pound in the very early hours of Thursday morning. Market expectations for a rate-hike in Europe may have been dealt a slight blow yesterday, with the release of Euro-zone CPI figures. The figures showed that the risk of inflation has dampened slightly; the core index reading showing that price growth dropped from 1.6% to 1.5% month-on-month, and fell slightly from 2.8% down to 2.7% annually. While the figure still remains above the ECB’s target level, it may be an indication to the market that the heightened levels are temporary, and do not require a tightening of monetary policy.

While the delicate situation regarding a potential bail-out for Greece continues, the Greek Prime Minister George Papandreou appointed current Defence Minister Evangelos Venizelos as his new finance minister and deputy prime minister in a government reshuffle yesterday. Traders will be watching the situation closely, with Germany being one of the most likely member states to push for an immediate solution.

The economic docket for Europe today will focus on the Euro-zone trade balance results for April. Should the figures show a swing towards exports outweighing imports in the Euro-zone (a trade surplus) it would have the potential to provide some buoyancy to the Euro, as it would show an increased flow of funds into Europe. If the Euro was to start finding some strength, it would start making it more expensive for UK consumers that are buying Euros.

The US Dollar held steady yesterday, after making huge gains against the Pound on Wednesday, the GBP/USD rate staying at mid 1.61 levels throughout most of Thursday. The huge drop on Wednesday down from 1.6430 has suddenly made it more expensive for UK consumers buying Dollars. The US economic docket yesterday did show some encouraging signs for the economy – building permit figures showed an increase, up from 563,000 to 612,000. Housing starts were also up, from 541,000 to 560,000. The labour market received a welcome boost when figures showed that initial jobless claims fell month-on-month, down from 430,000 claims to 414,000 claims.

Today’s US economic docket will focus solely on the University of Michigan’s confidence survey for June. The figure is considered to be one of the foremost indicators of consumer sentiment in the US, and any drop is usually considered an early indicator of economic downturn. Analysts are predicting a slight drop, from 74.3 to 74.0, but this may not be a large enough swing to hurt the US currency too much.

Mike Hood
KBRFX

Foreign Exchange Daily Market Update 17/05/11

Despite yesterday's lack of data the Pound managed to rebound from a low of 1.6158 against the US Dollar and to test levels of 1.6250, while at the same time the currency ended the day lower against the Euro at 1.1440 down from its early morning high of 1.1505.

Today, the UK's docket will focus on inflation. The headline figure, the Consumer Price Index (CPI) was expected to show that prices rose annually by 4.1% in April and that the core index was to hold steady at 3.2%. However inflation came in above these expectations with the core index reaching 3.7% and the total CPI reading hitting 4.5%. The Bank of England has repeatedly stressed that higher food and energy costs are temporary and will die down, but with the central bank forecasting that CPI will rise to 5% this year, an interest rate hike may well be on the way. The outcome will raise expectations that the MPC's last vote count will show at least 4 members voting for some form of a rate hike, but traders will have to wait until Wednesday for the release of the minutes to May's policy meeting.

The FX market seemed to have little reaction to yesterday's Euro-zone consumer price index which rose at an annualized rate of 2.8% April to meet expectations, with core price inflation coming in above the consensus with 1.6% growth. At the same time, the region's trade surplus was larger than expected with non-seasonally adjusted balance showing a surplus of €2.8 billion. The currency also remained stable in the face of IMF Managing Director Dominique Strauss-Kahn being arrested on sexual assault charges. Strauss-Kahn was scheduled to attend the EU Finance Minister's Summit being held in Brussels today, but Deputy MD Nemat Shafik has gone in his place. The summit had been called to discuss, among other things, the Greek bailout package, with finance ministers asking the nation to sell assets and deepen its spending cuts in order to win an extension of its aid package to €110 billion. Finance ministers also agreed to endorse Portugal's €78 billion bailout package, but the package still requires approval by all euro-area governments, and is expected to run over a 3-year period if approved. The EU Finance Ministers' summit continues for a second day today.

Looking at today's scant line up, economic confidence is expected to have fallen across Germany and the Euro-zone in the month of May, according to forecasts for the ZEW surveys. Economic analysts foresee the index slipping from 19.7 to 17.3 in the Euro-zone, while the German reading should fall to 4.5 from 7.6. As sentiment weakens in the Euro-zone, the outcome has the potential to weigh on the Euro exchange rate making it cheaper to buy Euros.

During a speech in Washington, the Fed Chairman Ben Bernanke suggested that the US government should fund research and development. The Chairman believed that this would boost economic growth in America, while also supporting science through education. Notably Bernanke refrained from commenting on the outlook for the economy or monetary policy. On the data front, the New York Fed's Empire manufacturing index showed that manufacturing activity grew at a slower pace compared to April, as the index fell from 21.70 to 11.90, missing expectations for 19.70 reading. This was then followed by a disappointing NAHB housing market index which held at 16, missing calls for a print of 17.

The week's first round of US housing market data makes an appearance today with building permits set to rise by 0.3% in April to an annualized rate of 587,000, with housing starts for the same period expected to pick up 3.5%. A small increase in building permits would highlight the weak state of the US housing market.