Better Eurozone data boosts the euro | Smart Daily Currency Note
GBP/USD – 1.5543
It was a reasonably good day for sterling yesterday as the Bank of England embarks upon a two-day Monetary policy committee meeting to review interest rates. Despite weakening against a stronger euro, it rose by the most in two months against the US dollar during the afternoon. The HBOS house price index data came in better than expected during the morning, giving sterling an early boost, whilst gains later in the day have been attributed to speculation amongst traders that the Bank of England will vote against any further loosening of monetary policy in a statement tomorrow. Monthly manufacturing output data, monthly GDP data and other announcements from the Bank of England concerning the official interest rate and asset purchase facility could all have an impact today, which could throw a degree of turbulence into price levels. Call your trader now to see if the rebound from March is being sustained.
The US dollar failed to maintain an upward trend following favourable employment figures earlier in the month – falling against both the sterling and euro throughout yesterday. Despite news that the currency was close to reaching the psychologically important 100 Japanese yen level, data releases were fairly light in anticipation of the Federal Reserve Chairman speaking on Friday. Wholesale activity data coming out this evening is expected to show a pickup though March however and a run of positive developments would certainly increase the currency’s appeal, especially if the outcomes increases expectations of the Federal Reserve reducing its asset purchasing programme. US Dollar gains have indeed been diluted under the shadow of the programme, though there is a greater discussion to scale back on quantitative easing as the recovery in the world’s largest economy gathers pace. The Federal Reserve Chairman’s speech may give clues as to what we can expect, so keep up to date with developments with your trader throughout today.
Sterling gains against the US dollar | Smart Daily Currency Note