US dollar strengthens, UK awaits BoE minutes | Smart Daily Currency Note
GBP/USD – 1.5195
Sterling struggled to hold it’s ground before the weekend, most notably against a strong US dollar, though with the Bank of England looking less likely to increase the level of quantitative easing for now, this decline could be short lived. Indeed one of the members of the Bank of England committee spoke on Friday about the risks inherent in increasing the asset purchase facility beyond its current target level without risking higher inflation. UK Consumer Price Index inflation data is released on Tuesday, the Bank of England meeting minutes are released the following morning and significant growth and retail sales figures on Thursday. Sterling remains vulnerable to poor data emanating from the economy but could find strength if growth and inflation remains in line with expectations set over the last week. Be in touch over the coming days with your trader for reactions and live prices.
The US dollar continued to strengthen throughout Friday as much better than expected consumer sentiment figures were released alongside continued speculation regarding the Federal Reserve moving closer to ending it’s asset purchasing programme. The US economy continues to show some signs of a sustained recovery and ahead of this week’s release of minutes from the Federal Open Market Committee’s last meeting, the central bank may be prompted to taper off it’s quantitative easing activity. A winding down of the central bank’s monthly asset purchasing activity could happen as soon as this summer according to the President of the Federal Bank of San Francisco. Wednesday will be significant as Federal Reserve Chairman testifies before the Federal Open Market Committee’s and the latest meeting minutes are released, whilst unemployment claims data and home sales figures follow on Thursday. Be in touch throughout the week for whether the US dollar can maintain it’s upward momentum.