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20 Apr 2016
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GBP/EUR higher as latest Brexit poll shows strong lead for UK to Remain

United States Dollar: GBP/USD, Sterling’s gains have tailed off through overnight and this morning’s trades. Yesterday the pair continued to test the 1.44 level as both February’s ILO unemployment and Claimant count rate came in on par. Feb’s Average Earnings including bonus and Claimant count change did actually miss expectations with figures of 1.8% and 6.7K respectively. Perhaps if the latter numbers were also on par the pound would have broken and held above 1.44 but it wasn’t meant to be. Later in the day the Greenback experience some strength as US Existing home sales improved considerably to 5.1% versus 3.5% expected and -7.3% the previous month. This morning the UK posted their latest set of retail sales for March and all measures came in lower than predicted. Annualized retail sales posted at 2.7% vs 4.4% exp while Monthly figures decreased to -1.3% vs -0.1% expected. Attention now turns to a host of US data in the form of Jobless Claims, Philadelphia Fed Manufacturing Survey, Housing Price Index and CB leading indicator. We open today with GBP/USD at 1.4335.

We expect a range today in the GBP/USD rate of 1.4290 to 1.4385

Euro: GBP/EUR, with little coming from ECB president Draghi’s speech in Frankfurt and markets shrugging off the UK unemployment / earnings figures, Pound Euro spent much of yesterday’s trading a fairly tight range between its open of 1.2650 and 1.2685. The afternoon however saw Sterling gap higher, breaking the 1.27 mark briefly before hovering just below for the rest of the day. This was due to a Brexit poll by IPSOS Mori, a leading market research company in the UK, that has the remain voters at a strong lead of 49% vs 39% to leave. Following an overnight high of 1.2709, the disappointing UK retail sales numbers did see the pair fall to a morning low of 1.2670 but it now seems to be pulling back. No further figures are due from the UK so the focus will be on the ECB Interest / deposit rate decision and their accompanying monetary policy statement. We open today with GBP/EUR at 1.2695. EUR/USD, yesterday’s movements have been larger to the downside with German PPI numbers hitting the single currency in the morning and then US Existing home sales bumping up the dollar in the afternoon. Annualized German Producer price index for March posted -3.1% vs -2.9% exp while monthly numbers were due to improve to 0.2% from -0.5% the previous month but instead came in at 0.0%. As mentioned above US existing home sales change showed a big jump from the previous month’s number of -7.3% to come in at 5.1% and Euro dollar unsurprisingly fell from its intraday high of 1.1381 to a low 1.1289. Strong volatility is expected for the rest of the day with the ECB rate decision and monetary policy statement plus US Jobless claims, Philadelphia Fed Manufacturing Survey, Housing price Index and CB leading indicator. We open today with EUR/USD at 1.13.

We expect a range today in the GBP/EUR rate of 1.2645 to 1.2735

Aussie and Kiwi Dollars: The Aussie and Kiwi dollars continued their rallies yesterday as improved risk appetite, supported by an increase in Oil prices, helped support the commodity linked currencies. Overnight improved Existing home sales data from the US saw the Greenback gain back some ground while this morning’s retail sales number have seen support for Sterling wain. With a data clear docket for the UK, OZ and NZ, movements are likely to be dominated by the ECB announcement and US figures this afternoon. We open today with GBP/AUD at 1.8395 and GBP/NZD at 2.0650

We expect a range today in the GBP/AUD rate of 1.8310 to 1.8465

We expect a range today in the GBP/NZD rate of 2.0575 to 2.0750

Data Releases

AUD: No Data

EUR: ECB Interest / Deposit rate decision, ECB monetary Policy Statement

GBP: No Data

NZD: No Data

USD: Jobless Claims, Philadelphia Fed Manufacturing Survey (Apr), Housing Price Index (MoM) (Feb), CB Leading Indicator (MoM) (Mar)

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