he main draw will undoubtedly be the appearances of Fed Chair Janet Yellen and ECB President Mario Draghi after European markets close. The general consensus is for Draghi to maintain his existing forward guidance and we think he will probably be reluctant to hint that a tapering in the quantitative easing programme is on the horizon at this juncture. In fact, he may choose to dampen expectations for an immediate taper in the asset purchasing programme, given the recent sharp appreciation in the Euro, and we think that risks to EUR/USD are actually skewed somewhat to the downside today.

As for Yellen, we think she will need to convince the market that an interest rate hike by the Federal Reserve remains on the cards in December. Financial markets have pushed back their expectations for the next hike in the US until 2018, too far out in our view given the US’s strong labour market and solid inflation. Yellen will be speaking at around 17:00 UK time, followed by Draghi at 20:00. Ahead of today’s main event, investors are unlikely to commit to positions either way and the major currencies could remain fairly range bound during London trading.

Prior to today’s conference, Sterling recovered from its lowest level in two months against the US Dollar on Thursday after the latest GDP data confirmed that the UK economy grew by 0.3% in the three months to June. Yesterday’s data showed that Britain’s economy expanded at half the pace than that of the Eurozone in the first half of 2017. The divergence in economic performance between Europe and the UK can be attributed to much of the depreciation in Sterling, which has now seen the currency fall by almost 8% on the Euro this year alone.

Meanwhile, the Euro was little moved throughout much of the day, trading around the 1.18 mark against the Dollar in the absence of any market moving news. Growth data for Spain was revised upwards somewhat to an impressive 0.9% in Q2 from 0.8%. This morning we’ll have the revised GDP data for Germany although, as mentioned earlier, the common currency is likely to remain stuck within a range during the London session ahead of today’s Jackson Hole meet in the US.