Hometrack housing data placed the Pound on the back foot yesterday and with a lack of further economic data Sterling traded at the mercy of wider market movements for the remainder of the day. The stress test results continued to affect Euro trade as investor confidence remained well supported by the data. Some criticism has come from the fact that not all banks disclosed their sovereign debt exposures on Friday. Regulators brushed aside concerns and many of the 7 banks that did not initially disclose their sovereign debt exposures, published their figures yesterday. On balance investor confidence remains high and the single currency maintained an upward trend through the day.

The dollar gained some brief support from better than expected housing data. U.S. new home sales rose to 330K in June, up from May’s 267K release. Equity markets have remained in positive territory and has kept the Dollar range bound overnight.

German GfK consumer confidence rose to 3.9 in August, higher than the 3.5 expected and has given the Euro some early support. There is no further European data scheduled for release and profit-taking on a key technical level in EUR/USD has pulled back Euro gains. There is no U.K. data to be released today whilst in the U.S. consumer confidence data is expected.