Sterling rose broadly today on political opinion polls whilst the Euro snapped five days of gains against the Dollar.
Pound Sterling – UK Markets
Sterling reached a seven-week high against the Dollar this morning after an opinion poll suggested the opposition Conservatives could win an overall majority in the UK election. The Pound also hit a one-week high against the euro as the poll showed the Conservatives leading Labour by twelve points in crucial marginal constituencies.
Until the release of March inflation data next Tuesday we’ll be experiencing a dry patch for UK economic statistics barring today’s consumer confidence figures for March.
The freshest figures for traders to ponder came from the Council of Mortgage Lenders, indicating an upturn in the housing market in February. However, we’ll get a more clarified idea of the housing market when seasonally adjusted data becomes available for the first quarter.
US Dollar – US Markets
Traders can expect the greenback to either correct itself or extend its bearish streak today, depending on the outcome of a number of news events.
The Dollar slipped against several currencies yesterday, most notably the Euro and the Pound, following a testimony by Fed Chairman Bernanke in which he explicitly stated that interest rates would remain at their record lows for quite some time.
However, forecasts for the US Unemployment Claims Report and the TIC Long-Term Purchase figure are fairly optimistic. Providing they emerge positive for USD, the currency should be able to correct the downward trend it suffered yesterday. On the other hand, any surprise results from either of those reports will end up hurting the greenback in afternoon trading.
Euro – European Markets
The Euro’s gains against the Dollar have come to a halt today on concern that the EU-led rescue plan for Greece won’t be enough to restore the currency’s credibility. The Euro had previously been carried by positive sentiment following the unveiling of the bailout plan, and managed to extend its gains against the Dollar yesterday before it’s drop this morning.
Traders eying the Euro rate will be looking across the pond to the US for any data developments, as this will likely determine whether or not the European currency will fall further in the course of the day.
Other Currencies – Highlights
Singapore’s currency revaluation could prompt policy makers in China, South Korea and Indonesia to begin withdrawing monetary stimulus.
Economic growth in the region has been accelerating at a fast rate, rising commodity costs are spurring price pressures and economists predict that China may allow the Yuan to appreciate by June 30th to curb inflation.
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