Sterling came under increased pressure throughout the day yesterday, making losses against all major currencies. Although there were no new major developments, market confidence is suffering ahead of the upcoming EU referendum. Volatility is rising as new polls are highlighting a narrowing gap between the ‘remain vote’ and ‘exit vote’. The lack of economic data due today for the UK means the Pound will be left to market sentiment again.
The Euro extended its gains against Sterling in yesterday's trading session to reach 1.2345, and has already peaked at 1.2326 this morning; the lowest level since June 2014. The Euro also benefitted from the Dollar selloff as the pair hit fresh 2016 highs, breaking through its resistance at the 1.1400 area, a gain of half a percent.
An indication of anti-EU sentiment was revealed yesterday as one of Europe's founding members, the Netherlands, rejected a treaty between the European Bloc and Ukraine by 61%. Admittedly, the turnout only just passed the minimum required and the result isn’t binding, but it does add to the “Brexit debate” discussions.
Today, attention will turn to European Central Bank (ECB) Monetary Policy Meeting Accounts and Mario Draghi’s speech on the state of the European economy. We will be watching to see if he succumbs to temptation and uses the speech as an opportunity to weaken the single currency.
In the US, the Federal Open Market Committee minutes for March were released yesterday evening. They were largely ignored as the market already suspected there would be no April rate hike. The Dollar had strengthened to just shy of 1.4000 by lunchtime versus the Pound, but reversed the trend as the Americans began to sell off the Dollar in the lead up to the release of the Fed minutes.
EURUSD followed a similar pattern as the pair fell to find support at the 1.1330 level leading up to the start of the US trading session, only to reverse as the Dollar sell off pushed the pair through 1.1430. The Greenback did stage a small rally against the Euro and the Pound after the St Louis Fed President Bullard expressed optimism over the outlook and a recovery in inflation expectations.
Data to watch: 12.30 pm ECB Monetary Policy Meeting Accounts. 1.30pm US Initial & Continuing Jobless Claims. 2pm ECB’s Mario Draghi speech. 8pm US February Consumer Credit Change. 10.30pm US Fed’s Yellen speech.
Posted in Daily Market News on Apr 7 2016
Sterling fell to its lowest level against the Euro since September 2014 yesterday, as Brexit concerns continue to drag down the currency. The monthly Purchasing Managers Index (PMI) survey of the service sector was released and showed an improvement on the previous month.
VIEW FULL ARTICLEPosted in Daily Market News on Apr 6 2016 by William Kemp and the Sales Team
Posted in Daily Market News on Apr 5 2016 by William Kemp and the Sales Team
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