A report just released in the UK has shown that consumer price inflation in the country rose for February. However, the nation’s annual core inflation nudged lower last month, fuelling uncertainty with the nation’s consumer price growth. Moving ahead, Sterling traders will keep a tab on Thursday’s retail sales print in Britain to gauge the health of spending among local consumers.

Across the Atlantic, data scheduled later today is expected to show that consumer price inflation rose for February on a monthly basis, after registering a fall for the past three months. In the Euro zone, upbeat flash manufacturing and services PMI readings for March boosted expectations that activity in the region’s private sector is picking up.

Pound Sterling – UK Markets

The just out data has revealed that on a monthly basis consumer price inflation in the UK registered a rise for February, despite falling oil prices, while core inflation showed a more than expected ease for the last month. With today’s inflation data giving mixed signals, market participants remain uncertain over the direction of domestic price growth, especially after the BoE Chair, Mark Carney, hinted recently that a prolonged period of low inflation is likely to delay the timing of an interest rate rise in the UK. Meanwhile, the Pound is trading in a tight range against the greenback and on a weaker footing against the Euro this morning. Going forward, investors will keep a tab on retail sales data in the UK this week to gauge the health of consumer spending for February.

In yesterday’s trading session, Sterling lost ground against the common currency. A survey released by the Confederation of British Industry showed that order growth among UK manufacturers stagnated for March, as an extended period of softness in the Euro zone economy, along with an elevated Sterling, weighed on overseas demand of British goods.

US Dollar – US Markets

The US Dollar is trading in a tight range against the Euro this morning, ahead of key economic releases in the nation today. The US CPI for February, which is keenly eyed, is anticipated to show an improvement following a modest rebound in energy prices last month. The core CPI is expected to edge slightly higher for February. The FOMC in its March meeting had revealed that it expects to see some stabilisation in core inflation before beginning to normalise monetary policy. Separately, US new home sales are anticipated to drop for February, in line with the housing starts data released last week for the same period. Today’s new home sales numbers will largely reflect the impact of bad weather, especially in the Midwest and Northeast regions. Meanwhile in a speech the FOMC voting member, John Williams, opined that the Fed should consider raising interest rates by mid-year.

The greenback reversed its earlier session gains and traded lower against the majors yesterday, amid uncertainty over the timing of an interest rate rise. Meanwhile, data showed that existing home sales rose less than expected for February.

Euro – European Markets

The Euro is trading higher against the greenback this morning, following the release of upbeat flash Markit PMI readings in the Euro zone for March. Data indicated that activity in both the manufacturing and the services sector in the Euro zone, as well as its largest economy, ticked up more than expected from last month.

The Euro traded higher against its major counterparts yesterday after ECB President, Mario Draghi, issued a bright outlook for the economy. He added that the monetary stimulus, lower oil prices and a weaker currency are likely to contribute to strong growth in the economy. Meanwhile, no breakthrough was achieved in resolving Greece’s debt problems in a meeting between the Greek Prime Minister, Alexis Tsipras and German Chancellor, Angela Merkel. On the data front, the flash estimate of consumer confidence for March showed that sentiment was boosted in the Euro zone economy by falling oil prices and hopes of a pickup in economic growth following the launch of the ECB’s QE programme.

Other Currencies – Highlights

The New Zealand Dollar is trading in a tight range against the US Dollar this morning, ahead of the crucial US CPI, manufacturing and new home sales data scheduled later today. Trading in the currency pair today will also be influenced by trade data from New Zealand, due later in the day. Market participants expect a sharp increase in trade surplus for February, buoyed by a surge in exports during the period. Earlier, the New Zealand Dollar had lost ground against the greenback after data indicated that preliminary Chinese manufacturing activity contracted for March.

The New Zealand Dollar traded higher against its US counterpart on Monday, as uncertainty over the timing of a US rate rise continued to weigh on demand for the greenback. Data released over the weekend showed that consumer confidence in New Zealand picked up during the first quarter as falling petrol prices and mortgage rates boosted household spending power.