The Pound moved up from five month lows against the Euro yesterday, only for European inflation data this morning to send it tumbling down to even lower levels then those seen at the start of this week. Speculation was already rife that an interest rate rise would be taken in Europe in April, and the higher inflation figure at 2.6 percent has now made this even more likely. If you have Euros to exchange back into Sterling or another currency, now is a great time to consider fixing the rate. Many of our farm business clients with Single Farmers Payments to exchange from Euros to Sterling later in the year are fixing into today’s rate using a forward contract. Call your broker or register an enquiry online to find out more.
Pound Sterling – UK Markets
Following a drop against the Euro in the second half of yesterday, the Pound gained some ground into the start of today as house prices were revealed by Nationwide as rising in March and following yesterday’s positive services data. The release of higher inflation data in Europe later this morning however has sent Sterling down again.
There has also been upwards movement against the Dollar so far today. This morning’s housing data indicated 0.5 percent growth in March which has helped the currency although the Nationwide housing report did also comment that the market is expected to remain sluggish and this does not indicate a move into sustained growth in the property sector.
US Dollar – US Markets
The Dollar has been dropping as yesterday’s ADP employment change figures, which measures the change in the number of people employed in the US, were disappointing. Whilst there was expected to be an employment change figure of 205,000 the actual figure was only 201,000.
The rise in European inflation today will also not help the Dollar as any interest rate rise in Europe is likely to see funds flow from the Euro and into the Dollar. There are US factory orders to watch out for this afternoon.
Euro – European Markets
European CPI inflation figures this morning have revealed that inflation unexpectedly accelerated to 2.6 percent in March from a level of 2.4 percent in February. This will only add more weight to the argument of those wanting an interest rate rise in Europe at the start of April and is therefore likely to help the Euro maintain its currently strong levels.
There are however, the debt issues of the various nations still bubbling away in the background. Stress tests on Irish banks Allied Irish Banks, Bank of Ireland, the Educational Building Society (EBS) and the Irish Life & Permanent are being revealed later today. It is thought that the results will reveal the banks need further funds with up to a 25 billion Euro shortfall.
Other Currencies – Highlights
The Ministry of Finance in Tokyo has revealed today the moves taken to bring down the Japanese Yen. It has emerged that Japan has sold 692.5 billion Yen since 25th February as the high bought about the earthquake threatened the Japanese economy.
The Yen has been strengthening against Sterling since Tuesday this week to the highest levels in two weeks.
Sterling Rises Sharply on Renewed Hopes of the UK Leaving With a Deal
Dollar Rises Modestly on FOMC Minutes
Sterling Rises on Hopes of EU Softening Tone on Backstop