Cyprus shockwaves undermine the Eurozone | Smart Daily Currency Note
GBP/USD – 1.5094
Sterling performed relatively well on Friday following comments from the Governor of the Bank of England who said that the central bank is not actively trying to devalue sterling, furthermore stating that he does not think that it will drop much further. It is an extremely important week for sterling with two hugely influential releases in the form of the Chancellors budget and the minutes from the latest Bank of England Monetary Policy Committee (MPC) meeting. The market will look to the meeting minutes to see if any more of the MPC members voted in favour of increasing the current levels of quantitative easing, whilst traders will pay particularly close attention to the Chancellors budget. We also have key inflation data, retail sales figures and statistics showing the change in the number of people claiming unemployment related benefits. With so much happening in the UK this week, there is a high probability of increased volatility and the potential for dramatic downside movements should we see a raft of negativity. Call in now to speak to your trader and to see what you can do to protect yourself from adverse market movement.
The US dollar had a poor day on Friday, dropping quite heavily against the majority of its trading partners. This was in part down to the release of the Core CPI inflation data, showing the change in the price of goods and services purchased by consumers remains contained, meaning it is less likely that the central bank will tighten monetary policy in the near term. Other data released showed that both consumer sentiment figures and the empire state manufacturing index came in short of market estimates. This week sees the release of a few important pieces of data. On Tuesday we see the release of building permits statistics – a good gauge for the future of the construction industry. On Wednesday we have the monetary policy decision from the Federal Reserve. No change is expected, but the comments that follow on the quarterly economic projections, showing the predicted levels for inflation and economic growth is likely to cause a reaction in the markets. Other data released this week includes existing home sales, weekly unemployment claims and the Philly manufacturing index. It is set up to be an interesting week for the US dollar, so get in touch for the latest rates.