Yesterday was a fairly quiet day for data, however Sterling rose against the Dollar and the Euro as well as a host of other currencies recovering some of it’s recent losses as investors looked ahead to UK gross domestic product data for the fourth quarter due this morning at 09.30hrs.

The GDP figures are expected to show the economy returned to growth in the fourth quarter, with the consensus being a 0.4% quarterly rise.

Despite the confidence that the UK will return to growth investors and analysts remain wary that the reading may be softer than expected, particularly following Friday’s retail sales which rose much less than expected in December.

By mid afternoon yesterday sterling was up 0.4% on the day against the US Dollar at $1.6179 however rallied in the late afternoon following the only real significant data of the day, US existing home sales which came in worse than expected.

GBP was stronger against the Euro yesterday trading around 1.1450 in mid afternoon trade trading up on the day after a Euro rally following a successful Greek bond sale earlier in the day which pushed sterling to 1.1368.

UK GDP Data

Investors, analysts and traders are all wary of this mornings GDP data, being very aware that a soft reading could result in sterling losing all the gains it has made over the past few weeks. Mervyn King is also speaking shortly afterwards in is not expected to be particularly up beat about the economy as he hasn’t been for quite some time.

Gordon Brown said he was “confident” the UK was emerging from recession, but warned the recovery around the world and in the UK was “fragile” and that policymakers should “remain vigilant”.

Other data

A busy day for the US this afternoon with the house price index, Richmond Fed manufacturing and consumer confidence all out mid afternoon.

At 09.00hrs this morning the market were at $1.6242, €1.1520, 12.37 ZAR, 146.13 JPY, 1.7278 CAD, 1.6952 CHF, 11.83 SEK and AU$1.81.11. EUR/USD 1.4096.

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