United States Dollar: The Greenback came under further pressure yesterday. The headline releases for Tuesday both disappointed, with durable goods orders and consumer confidence both coming in under expectation. Demand for capital equipment remained weak in March the reason goods orders posted 0.2 % minus figure against an expected 0.6 % and separately consumer confidence came in 94.2 versus expected 95.8 after March’s revised 96.1. On the news, the US Dollar fell towards a 10-month low against a basket of major currencies. A resurged Sterling took advantage of the news and cable reached a session high of 1.4632 overnight. Cable currently sits at 1.4595 – 9:00 am. The key releases continue today as with the eagerly anticipated interest rate announcement from the US. Well, not so much the interest rate announcement as no change is expected, but whether the following statement will give any indicators to there being a rate hike in June. Around this, 9:30am we see UK prelim GDP release as a revised 0.6 % for January is looking to be met with a 0.4 % for the first quarter of 2016. I would expect todays volatility will be around the former of the two releases mentioned, with movement cautious in the build up to the FED announcement – unless we see anything surprising from the UK GDP update.
We expect a range today in the GBP/USD rate of 1.4320 to 1.4780
Euro: Nothing to comment on for Tuesdays Eurozone data, with no releases seen. This means movement was based on data elsewhere and this has been mainly covered in the United States Dollar commentary above. Sterling continues to put pressure on the Euro and new April highs were seen at 1.2919 yesterday. The last time GBP/EUR was at these highs was early March. USD weakness means EUR/USD has pushed higher for start of the European session. The currency pair is currently trading around 1.1325 this morning. GBP/EUR 1.2880 – 9:00 am. Both UK and US data will have a play on where each of the domestic currencies sit against the EUR. I would expect that the recent gains for the Pound verses the Euro to continue, but expect resistance on breaking through the psychological barrier 1.3000.
We expect a range today in the GBP/EUR rate of 1.2770 to 1.2990
Aussie and Kiwi Dollars: Sterling surges higher against the Aussie. Australia took a disinflationary turn after consumer prices surprisingly fell in the first quarter, pulled by the tumbling cost of oil. The disturbingly weak report has revived talk the Reserve Bank of Australia could cut the already record-low 2 percent cash rate. This has taken GBP/AUD from 1.8798 prior to the release to initially 1.9040 and highs have been seen at 1.9190 over the past couple of hours. This is just shy of a 400 pip jump for the Sterling against the antipodean currency. New Zealand has also seen losses, on the back of the Australian news, but also on the basis of its own trade balance figures. This was the first negative post since October last year. GBP/AUD 1.9147 and GBP/NZD 2.1247 – 9:00 am. Ahead we anticipate the NZ interest rate announcement domestically. No change expected. Elsewhere, US interest rate decision will be a key release for the Aussie and Kiwi along with Japanese monetary policy statement. As Japans inflation has hovered over zero for around a year now, will the Bank of Japan act if it wants to be pre-emptive as comments from the Prime Minister Shinzo Abe suggests.
We expect a range today in the GBP/AUD rate of 1.9090 to 1.9290
We expect a range today in the GBP/NZD rate of 2.1120 to 2.1420
AUD: No data releases due for today
EUR: No data releases due for today
GBP: Prelim GDP q/q
NZD: Official cash rate, RBNZ rate statement
USD: Crude oil inventories, FOMC statement, Federal funds rate
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