Sterling stumbles and starts to fall | Smart Daily Currency Note

Sterling

Sterling tumbled on Wednesday in most of its major pairings - reaching seven week lows against the US dollar - stemming from poor retail sales data released yesterday morning and following the lower inflation levels from Tuesday. The UK currency struggled across the board despite making up some ground against the euro late on after retail sales dropped 1.3% due to a wet and cold winter; confounding expectations for a flat reading. Although the Monetary Policy Committee meeting minutes revealed that the Bank of England Governor Mervyn King was outvoted 3-6 again against expanding quantitative easing, speculation that incoming Governor Mark Carney will expand the asset purchase programme over coming months in light of lower inflation has contributed to sterling's weakness. This could be the start of another period of market negativity towards the UK currency, though Business Investment data and importantly GDP figures released today will be helpful if growth stays in line with expectations. Call in today for the latest market reaction to UK developments from this morning onwards.

Euro

The euro had a mixed day yesterday, with characteristically volatile price movement despite little data being released. Reaction to disappointing retail figures in Britain drove euro to a four-week high against sterling, though the seventeen-nation currency fell by over a cent against the US dollar in the afternoon following news from the Federal Reserve. European Union ministers continue to promote that unemployment and sluggish growth will be combated as a matter of urgency so the central bank will be under pressure to further support monetary union in touch economic and political times for the region. This morning sees the release of manufacturing and services PMI figures from the French and German core of the Eurozone where economists forecast a slight improvement on the previous month's data, though this is unlikely to be enough to inspire confidence regarding wider economic health from the heart of the Eurozone. Get in touch for the latest rates and on-going news today.

US dollar

The US dollar accentuated it's strength against most major counterparts yesterday. Federal Reserve Chairman Ben Bernanke spoke out Wednesday afternoon about tapering back it's quantitative easing programme over the coming months if the central bank can be confident of sustained economic recovery. Nonetheless, he stressed that the US economy is still weighed down by cuts in government spending and high unemployment, whereby a premature tightening of monetary policy would put the recovery at risk and force inflation downwards. Unemployment was highlighted as a costly issue as the country continues to deploy an aggressive bond-buying programme to boost growth. Along with New Home Sales figures, Unemployment claims data from the US will emerge this afternoon, which will likely have some sway over dollar value with Bernanke highlighting the job market as being key to monetary policy going forward. Call your trader now for up to the minute prices with Smart.

Worldwide

Elsewhere, the Canadian dollar's poor start to the week continued into yesterday, falling against the majority of its main trading partners, and to a two-month low against its US counterpart as crude oil prices maintained a downward trend. Canadian retail sales were also shown to have stagnated in March, raising expectation the central bank will reconsider its plan to raise interest rates. The Japanese yen also lost ground against the US dollar as well as the euro after the Bank of Japan affirmed a plan to double it's monetary base over a two year period. Their monetary policy meeting ended with little change in policy, though uncertainty will still surround the yen as to whether it's value has dropped far enough. The Bank of Japan Governor speaks this evening and his comments should shed some light on his attitude towards what has over recent months been a particularly assertive monetary policy going forward. Call your trader today for news and price levels in your currency pair.