There has finally been a mild turn around with both Sterling and the Dollar having the chance to appreciate a little against the Euro. Whilst predictions of when future interest rates will rise is still dominating, economic data is having more chance to shine through and affect rates. Rising UK consumer confidence has brought strength to the Pound with more optimism from the US economy allowing the Dollar to gain back some ground. Speak to your broker for a quote if you are interested in catching the upturn in the Pound on the Euro.
Pound Sterling – UK Markets
The Pound has risen against the Euro for the second consecutive day and is also now rising on the Dollar as UK consumer confidence picked up in March from a record low. Today the Government will sell 2 billion Pounds worth of gilts maturing in 2040.
Unemployment was also revealed as falling yesterday despite the fact that those claiming unemployment benefits increased. It seems that economic data is managing to have a little more impact on the currency markets after weeks of obsession with interest rates.
US Dollar – US Markets
The US Dollar has strengthened after Obama’s plans to cut the US deficit by 4 trillion Dollars in twelve years through a combination of spending cuts and tax rises. Economic data from the US was also more upbeat.
Retail sales rose for the ninth consecutive month and the Federal Reserve's Beige Book which provides an analysis of current economic conditions found that economic activity has been improving since March. Applications for jobless benefits are also expected to drop this week and inflation has advanced which is all helping provide support to the Dollar.
Euro – European Markets
The Euro has been experiencing movement – it has lost its recent highest points against Sterling. The currency is still relatively strong against the Dollar despite making some losses so far today.
Inflation data tomorrow will be key. Markets are expecting inflation to have advanced to 1.3 percent in March – if this should occur or the inflation figure is even higher it could suggest that the European Central Bank will make another rate rise and thereby encourage Euro to stay strong.
Other Currencies – Highlights
The Singapore Dollar has risen to the strongest levels in thirty years after the Central Bank revealed that it will allow the currency to appreciate to combat inflation.
The New Zealand Dollar has also risen to a five month high on the Dollar – with the initial rise being triggered by excellent house price data yesterday with prices up by 0.5
BoE less likely to increase interest rates in May
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