European session review: the pound continues to rise against the dollar

The following data was published:

(Time / country / index / period / previous value / forecast)

6:00 Germany GDP q / q (final data) II quarter 0.7% 0.4% 0.4%

6:00 Germany GDP y / y (final data) II quarter 1.5% 3.1% 3.1%

8:30 UK approved applications for mortgage loans on the BBA figures, thousand. July 39.76 37.66 38.5

The dollar rose strongly against the euro, approaching a week high, helped by expectations of Friday's speech by Fed Janet Yellen, which may shed light on the prospects of the Fed's monetary policy. Investors still believe the rate hike this year is unlikely against the backdrop of weak data on production and GDP. However, recent comments by Fed leaders have increased the likelihood of further rate hikes. According to the futures market, the probability of Fed rate increase in September is 18% against 21% the previous day and at the December meeting is estimated at 43.1% versus 41.1% yesterday.

A slight impact on the course of trading has also provided statistics for Germany. The final report, published by the Statistical Office Destatis, showed that the German economy in the 2nd quarter increased by 0.4% compared to the previous three months, when GDP grew by 0.7%. In annual terms, the economy has added 3.1%. The last change (as in the quarterly and on an annual basis) in line with expectations. At the end of the 2nd quarter, German exports increased by 1.2% and imports decreased by 0.1%. Meanwhile, consumer spending rose by 0.2% after rising 0.3% in the 1st quarter.

Later today, the focus will be on housing sales in the secondary market in the US, which may well turn out to be quite strong as yesterday's statistics on sales of new buildings.

The pound has appreciated significantly against the dollar, updating the 3-week high. The catalyst for such dynamics was renewed fall in EUR / GBP. At the same time, data from the British Bankers Association (BBA), showed that the number of approved applications for mortgage loans decreased by the end of July, reaching its lowest level since the beginning of 2015. According to the report, the number of approved mortgage loans decreased in to a level of 37,662 units compared to 39,763 units in June (revised from 40,100). The latter figure was the lowest since January 2015, when the number of mortgage approvals was 36,649 units. In addition, it was reported that the number of permits approved for house purchase was approximately 19% lower than in July 2015. The total volume of mortgage loans amounted was 12.6 billion pounds, an increase of 6% compared with July last year. Meanwhile, consumer loans continued to show an annual growth of more than 6%, reflecting strong retail sales and, in the case of personal loans and overdrafts, favorable interest rates.

EUR / USD: during the European session, the pair fell to $ 1.1255

GBP / USD: during the European session, the pair has risen to $ 1.3248

USD / JPY: during the European session, the pair fell to Y100.08 and then rebounded