Pound after Goldman Sach's results

The pound strengthened by 0.51% against the dollar yesterday to finish the day at $1.6307.

• The pound continued to strengthen against the dollar yesterday following the release of Goldman Sachs’ second-quarter earnings. They reported a profit of $3.44bn ($4.93 per share), much more than the forecast of $3.42 per share. Such positive results have resulted in renewed optimism in the financial sector thus increasing investors’ demand for riskier currencies.
  
• JP Morgan Chase will be announcing their earnings tomorrow whilst Citigroup and Bank of America will follow on Friday.
  
• Consumer price inflation data was announced in the UK yesterday which showed that inflation has fallen below the Bank of England’s 2% target rate. This is the first time this has occurred since September 2007 which indicates that the BOE’s measures of combating the recession such as cutting interest rates and implementing quantitative easing has had an effect on prices, however it is likely that rates will remain at 0.5% well into 2010. Analysts are also speculating that quantitative easing will be extended in the future.
  
• House price data was also released by the Department for Communities and Local Government in the UK yesterday showing a smaller fall in May in comparison to the previous month thus also suggesting positive signs that the economy is beginning its recovery.
  
• In the U.S., the FOMC minutes will be a focal point for today, which will be scrutinised for insights on the Fed's decision not to increase its quantitative easing measures at the June 23/24 policy meeting. It is likely that the minutes will show the Fed decided to remain steady in order to improve the current economical situation and also in order to detract from concerns over deflation. Such statements are likely to increase risk appetite further.
  
• In the UK, jobless claims data and unemployment rate will be released today. In the US, MBA Mortgage Applications, Consumer Price Index and Industrial Production will also be announced this afternoon.