Sterling
The announcement that the government's Funding for Lending scheme (the scheme designed to give the economy a boost by encouraging banks to lend to businesses and households) is to be extended lent support to sterling yesterday, trading in a half-a-cent range as everyone looked ahead to today's preliminary first quarter growth figures. While only preliminary, the UK’s growth figures, are being viewed with great anticipation as they will show whether or not the UK has slipped back into recession. The general consensus is for 0.1% growth, if we see any deviation from this figure expect to see considerable movement. Call in now to find out the verdict and for a live rate.
The euro stuttered as hopes that Italy could at last find a resolution to political instability were offset by disappointing German data that fuelled anticipation of the European Central bank cutting interest rates further in next Thursday's Monetary Policy committee meeting. The German Business Climate Index dropped more than economists predicted for a second month in a row whilst Italian Retail Sales data indicated a slight contraction. Traders drew some confidence from reports that the formation of a coalition government in the euro zone's third-largest economy could yet emerge and offer relief to investors buying assets in the region. With speculation rife that the ECB could well cut interest rates in the next central bank meeting, today’s release of Spanish unemployment data could well add more fuel to the fire, so call in today for how this affects euro pricing.
The US dollar has weakened overnight against both the US dollar and the euro. Orders for American Durable Goods fell by almost 6% in March, almost twice of what was expected, whilst Capital Goods Orders – often a barometer for future business investment – grew at a slower pace than analysts had anticipated. With demand for these US products faltering, this data may be seen as highlighting a further slowdown in private sector consumption. First quarter GDP figures are released on Friday and it will be interesting to see if they support a more gloomy outlook for growth in the world's largest economy going forward. Today, Unemployment Claims data will be the main release, so be in touch with your trader to discuss how this affects the US dollar price throughout the day.
Elsewhere, the New Zealand dollar performed well yesterday following the Reserve Bank of New Zealand’s leaving rates unchanged whilst signalling that the central bank was more likely to raise interest rates than cut them. The Japanese yen fell against the commodity backed currencies as analysts expect the currency to weaken further amid signs that the nation's investors are seeking foreign assets. The Swiss franc slid for a seventh day against the euro following renewed optimism for Italian political stability whilst the Canadian dollar suffered on the back of data out of the US. Be in touch to see how developments affect your currency pairs.
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