Yesterday’s poor UK GDP number failed to materially affect Sterling. An initial correction was clear, nonetheless short lived. Cable (GBP/USD) retraced to the 1.6080 level but find itself at 1.6180 this morning. Against the euro sterling, lost a lot more ground initially, a consequence of GDP data coupled with overall strengthening in the euro. All in all Sterling’s performance has demonstrated resilience in the face of negative events and we continue to advocate a bullish sterling theme. Overnight, the release of March Nationwide Consumer confidence hugely surprised to the upside which has also given GBP support.
The Fed did little to surprise the markets in its post decision statement and press conference. Bernanke did reiterate that the Fed remained ready to do more if conditions worsened, while keeping its policy stance firmly on hold on the rates outlook. In this context the USD has softened somewhat against some currencies in part due to the Fed meeting and weaker activity data out prior to the rates announcement and the positive sentiment leaving global markets in the green across the board.
Uncertainty still surrounds the Eurozone but versus GBP the EUR has found a range between 1.2170 and 1.2270. Whilst GBP has shown good progress against most major currencies including AUD, CAD, NZD and ZAR. Other significant moves have been seen with GBP/SEK which is now at levels not seen since mid 2010.
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