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07 Apr 2016
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EUR/USD falls from six month high on ECB minutes

United States Dollar: Sterling has continued to slide over the past 24 hours as it was sold in a day of risk-off trade. With equity markets dropping on falling oil prices and the latest ECB minutes (more later) GBP/USD dropped from around 1.4150 to a low of 1.4035 by the close of the New York session. The move into safe havens saw USD/JPY drop to its lowest level since October 2014 when the last stimulus bazooka was announced by the Bank of Japan. USD/JPY dropped below 108 prompting rumours that the BOJ may be forced to intervene in the fx markets to stop the appreciation. Yesterday evening saw a panel discussion in New York with current Fed Chair Janet Yellen being joined by previous Fed chiefs, Ben Bernanke, Alan Greenspan and Paul Volcker to talk about the health of the US economy. The high profile meeting didn’t cast any new light on when the Fed is likely to act next so 1 or 2 hikes is still the base case scenario for 2016. The pound is up this morning as stocks react to a rise in oil. The move higher has been tempered however by another bad manufacturing print from the UK. Monthly output fell by 1.1% further than the 0.2% slip expected. GBP/USD is currently trades at 1.41.

We expect a range today in the GBP/USD rate of 1.4035 – 1.4170

Euro: The minutes from the ECBs last meeting were released yesterday showing that policy makers debated taking the deposit rate to -0.3% further than the -0.2% implemented. The publication also showed that a tiered system of charging deposits was also considered but shelved because it was through to be too complex. The door was left open for further policy measures later in the year however downward pressure was added to stocks as it was more of a passing comment. EUR/USD cracked 1.1450 yesterday morning but retreated throughout the day. Its currently at 1.1385 with GBP/EUR at 1.2370.

We expect a range today in the GBP/EUR rate of 1.2340 – 1.2435

Aussie and Kiwi Dollars: The Aussie and Kiwi were sold off yesterday in reaction to falls in stocks and the price of oil. AUD/USD which had made a break above 77 cents dropped to .7640 on the release of the ECB minutes, with the Kiwi falling too. Mondays inflation data from China is the next data of note that will move the antipodeans. GBP/AUD is at 1.8685 and GBP/NZD is 2.0765.

We expect a range today in the GBP/AUD rate of 1.8625 – 1.8790

We expect a range today in the GBP/NZD rate of 2.0690 – 2.0850

Data Releases

AUD: No Data

EUR: No Data

GBP: No Data

NZD: No Data

USD: FOMC Member Dudley Speaks

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