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26 Mar 2015

Markets Await US GDP Data

United States Dollar: The pound was buoyed yesterday as monthly Retail Sales data beat forecast to show 0.7% growth for February. The report was the 23rd in succession showing year on year growth, the longest run since 2008. It also confirmed prices in stores had fallen for eight consecutive months, driven lower primarily by falling food and fuel costs, the latter having dropped a 15.5% since a year ago! GBP/USD pushed up to a session high of around 1.4990 immediately after the release however failed to break through the psychological 1.50 barrier. Given the zero rate of inflation, which is likely to dip into negative territory in the coming months, and the uncertainty surrounding the outcome of the general election it is likely GBP/USD will remain under pressure for some time to come. A better than expected US Unemployment release of 282k (exp 291k) helped strengthen the dollar throughout the afternoon and that dollar strength continues through to this morning with cable currently sat at 1.4818. The main focus of today is the final estimate of Q4 GDP from the States with a slight uptick to 2.4% from the last reading of 2.2% expected. Janet Yellen talks in San Francisco this evening.

We expect a range today in the GBP/USD rate of 1.48 to 1.4990

Euro: It has been a relatively quiet end to the week data-wise from the Eurozone so news from Greece continues to dominate the headlines with reports saying Greece has only a few weeks of cash left to pay its bills. The hard-line stance Syriza promised to take seems to be crumbling in the face of fierce resistance from Germany. Next week sees the latest Flash CPI reading from the Eurozone as well as separate readings from Germany and Spain amongst others. EUR/USD has dropped this morning to currently trade at 1.0818 with GBP/EUR at 1.3695.

We expect a range today in the GBP/EUR rate of 1.3640 to 1.3750

Aussie and Kiwi Dollars: With little data to end the week both the Kiwi and Aussie have moved lower on broader dollar strength. AUD/USD is back under .78 at .7790 with NZD/USD at .7555. GBP/AUD currently trades at 1.9018 with GBP/NZD at 1.9613.

We expect a range today in the GBP/AUD rate of 1.8920 to 1.9060

We expect a range today in the GBP/NZD rate of 1.9530 to 1.97

Data Releases

AUD: No data

EUR: No data

GBP: No data

NZD: No data

USD: FOMC Member Fischer Speaks; Final GDP q/q; Fed Chair Yellen Speaks

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