Sterling
Sterling showed no drastic change before the weekend against its major partners with exception to the Japanese yen where it lost ground for the first time in over a week. A quiet day for data in the UK was however influenced by data released elsewhere including weaker than expected US retail data. This week see's the release of important UK inflation data, retail sales figures as well as the Bank of England's inflation report which should give a good indication of their expectations. However, the most influential piece of news coming from the UK this week will be the meeting minutes from the latest Bank of England meeting. Traders will be nervous in the run up to Wednesdays release wondering if any more members voted in favour of extending the current monetary easing program. Call in now to get live rates for sterling.
The resilience of the euro lately has been surprising given the significant structural issues regarding Cyprus, Portugal, or Italian politics, and this week may start showing signs of vulnerability following the strength in Australian, Canadian and Scandinavian currencies. Big news before the weekend came in the shape of an impending ratification of a 10 billion Euro bailout for Cyprus, though there are worries this may have to be extended by up to 6 billion. Today will see seasonally adjusted trade balance data released though this tends to have a muted effect on the markets as it does not include Germany and France who publish theirs earlier. European inflation data and comments from the European Central Bank President on Tuesday could well set the tone for Euro movement over the week. Call your dedicated trader now to see how this affects your business.
The US dollar had a mixed reaction before the weekend to US retail sales data, which surprised in underperforming and falling 0.4% in March. This boosted expectations that the Federal Reserve's quantitative easing cycle will roll on for the time being, though the dollar declined from a four-year peak against the Japanese yen. Some reports before the weekend showed American confidence at a nine-month low despite some encouraging news and a strong equity market. Building Permits figures and inflation data are due to be released on Tuesday and this will shed light on how the dollar is reacting to the monetary stimulus programme. Call in now for reactions throughout this week.
Elsewhere, the Romanian leu performed well on Friday after two major investment banks encouraged its clients to buy Romanian bonds at auction this week whilst Asian currencies continued to outperform following the Bank of Japans recent aggressive monetary easing policy. It is a busy week on the data front and early this morning we have seen inflation data released from China. The governor of the Bank of Japan also spoke following the yen getting ever closer to its target price of 100 against the US dollar last week. The question now would seem to be whether they can slow the fall and this week at the G20 meetings we expect the finance chiefs to remind Japan about its pledge to not drive down the value of the yen. Tonight the minutes of this month's Australian Monetary Policy Committee meeting are released, though with no change in rates two weeks ago, expect market reaction to be muted. Wednesday sees the Bank of Canada update on interest rates and at present no change is expected. Call in today for an update on your currency, and the latest rates.
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