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28 Mar 2016
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Nice Quiet Easter Break

United States Dollar: The US was one of the few major economies with no bank holiday yesterday, and we saw 3 releases, that resulted in falls for the greenback. Personal spending stayed at 0.1% vs a forecast of 0.2%, whilst consumer purchases also missed forecast, slumping from the previous month. The dollar’s recent strength has been based on investors potentially seeing a rate-hike in April, especially after St. Louis Fed president Bullard said a case could be made for an increase if we see strong employment data, ahead of Friday’s non-farm payrolls release. The poor data yesterday has tempered the bulls somewhat, however this week sees plenty of opportunity for volatility, starting with a Janet Yellen speech tonight on “Economic Outlook and Monetary Policy,” following on from the earlier Consumer Confidence report. With the bank holiday weekend, there has been no data out for the pound, and there is nothing to add to that today. Sterling did rally against the Euro on Friday and this continued yesterday, moving back above 1.27 again. This was most likely due to profit-taking on a heavily oversold currency. Key releases this week are on Thursday (Current Account & GDP) and Friday (Manufacturing PMI). As per the previous few weeks, the currency will be sensitive to any Brexit-related news, such as with the Brussels attacks last week.

We expect a range today in the GBP/USD rate of 1.4050 to 1.4290

Euro: Similarly to the pound, bank holidays across the major European players (France, Italy, Germany), saw no data out yesterday, and today continues to be a quiet day. The movement we have seen was against the USD, which will be discussed shortly. Key releases are towards the end of the week, with inflation, manufacturing and employment all coming across Thursday and Friday to coincide with the beginning of April.

We expect a range today in the GBP/EUR rate of 1.2640 to 1.2775

Aussie and Kiwi Dollars: Despite also experiencing a bank holiday, the Aussie rose with the price of oil, as markets reverted to a risk-on sentiment. Nothing of note from either Aussie or Kiwi for the remainder of the week, however with Chinese manufacturing expected to increase on Friday, we could see the Aussie continue to climb. Analysts have been discussing the prospect of an RBA rate cut, as a strong Aussie makes exports less competitive, so this is something for any Aussie sellers to keep in mind.

We expect a range today in the GBP/AUD rate of 1.8600 to 1.8970

We expect a range today in the GBP/NZD rate of 2.0994 to 2.1361

Data Releases

AUD: No data

EUR: M3 Money Supply

GBP: No data

NZD: No data

USD: CB Consumer Confidence, Fed Chair Janet Yellen speaks

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