Sterling
It was a reasonably good day for sterling yesterday as the Bank of England embarks upon a two-day Monetary policy committee meeting to review interest rates. Despite weakening against a stronger euro, it rose by the most in two months against the US dollar during the afternoon. The HBOS house price index data came in better than expected during the morning, giving sterling an early boost, whilst gains later in the day have been attributed to speculation amongst traders that the Bank of England will vote against any further loosening of monetary policy in a statement tomorrow. Monthly manufacturing output data, monthly GDP data and other announcements from the Bank of England concerning the official interest rate and asset purchase facility could all have an impact today, which could throw a degree of turbulence into price levels. Call your trader now to see if the rebound from March is being sustained.
The euro enjoyed a strong day yesterday gaining almost a cent against the US dollar on the back of better than expected industrial production figures from Germany. Portugal shocked the markets, with March industrial sales figures vastly exceeding expectations, adding to a new found momentum gathering around the seventeen-nation currency. The gains continued as a European Central Bank board member said that the risk of break-up of the single currency is behind us, pushing the euro up towards 1.32 against the US dollar, and even gaining against a strong sterling over the course of Wednesday. The big story today is the Spanish bond auction this afternoon, with effects likely to be amplified by low trading volumes due to bank holidays in France and Germany. Call in now to see if euro has managed to keep strengthening.
The US dollar failed to maintain an upward trend following favourable employment figures earlier in the month – falling against both the sterling and euro throughout yesterday. Despite news that the currency was close to reaching the psychologically important 100 Japanese yen level, data releases were fairly light in anticipation of the Federal Reserve Chairman speaking on Friday. Wholesale activity data coming out this evening is expected to show a pickup though March however and a run of positive developments would certainly increase the currency's appeal, especially if the outcomes increases expectations of the Federal Reserve reducing its asset purchasing programme. US Dollar gains have indeed been diluted under the shadow of the programme, though there is a greater discussion to scale back on quantitative easing as the recovery in the world's largest economy gathers pace. The Federal Reserve Chairman’s speech may give clues as to what we can expect, so keep up to date with developments with your trader throughout today.
Elsewhere, Sweden's government committed to a more active, interventionist attitude towards the krona whilst the New Zealand dollar fell to a five-week low following the Reserve Bank's Governor announcement that selling off the currency would be done to protect growth. This was surprising news considering the currency has enjoyed strong performance recently. Significant for the Polish zloty was news that the country's central bank is to cut interest rates by 0.25% - the second such unexpected announcement in two days following the Reserve Bank of Australia's decision to slash its benchmark rate level. Poland has been struggling to recover from a sluggish growth that has left Europe's second largest economy in a precarious position. Overnight we saw unemployment data from Australia and New Zealand which immediately saw both currencies gain significant ground. Call in now to see what impact this had on your currency exchange rates.
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