Tuesday, 29 April 2014

DAX opens higher after double bottom

The dollar traded lower or unchanged against its G10 counterparts during the European morning Tuesday. The only exception was JPY. The greenback depreciated against CAD, SEK, NOK and AUD, while it was near its early morning levels against EUR, CHF, GBP and NZD.

·The main economic release during the morning was the first estimate of the UK GDP for Q1. UK growth accelerated to +0.8% on a quarterly basis from +0.7% in Q4, but missed market expectations of +0.9%. GBP/USD was trading above its early morning levels ahead of the release, but declined as soon as the numbers were out to trade virtually unchanged. We believe that much of the good news for GBP is already in the market (the Commitment of Traders report shows that speculative long positions are nearly the highest they’ve been since the financial crisis) and the currency is vulnerable to a pullback on bad news.

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