The Confederation of Business UK retail sales index beat the forecasts as it rebounded sharply in April, producing the strongest reading since September 2018. Retailers are expecting a positive sales performance next month but with a bit of a slowdown. The easing of lockdown restrictions have boosted confidence. Despite the data, Sterling retreated to near 1.3850 to the Dollar with buying on dips allowing a fresh move to break above 1.3900 around London due to optimism over the UK recovery outlook.
Markets are uneasy over the domestic political situation but global trends have had a greater influence on exchange rates so far. The news that 25% of UK adults have been fully vaccinated provided support to the Pound and it consolidated just above 1.3900 to the Dollar and circa 1.1500 against the Euro.
This morning Sterling opens near 1.3885 and the Euro still hovers around 1.1500.
The S&P Case-Shiller composite house-price index reported an increase of 11.9% in the year to February from 11.1% previously and the strongest reading since May 2014, maintaining expectations of inflationary pressures in the housing sector in the US.
Consumer confidence strengthened sharply to a 14-month high of 121.7 for April from a revised 109.0 in March and above consensus forecasts of 113.0. There was a jump in the present conditions index with a small net gain in the expectations index.
The Richmond Federal Reserve (Fed) manufacturing index was unchanged at 17 for the latest week and slightly below consensus forecasts while new and unfilled orders increased at a faster rate. There was a further steady increase in employment and a further acceleration in price increases for the month amid a sharp increases in prices paid.
There was a significant element of caution ahead of today’s Federal Reserve policy decision. Although little change is expected in the statement, there is some speculation that the rhetoric could be slightly more hawkish. In particular, markets will be looking for any hints on a potential tapering of bond purchases.
The Euro was unable to make headway in early Europe on yesterday and gradually edged lower amid a lack of fresh incentives, although overall trading ranges remained narrow.
As the Dollar was unable to gain any sustained support, the Euro found support above 1.2050 but stalled just below the 1.2100 as the Greenback resisted further selling pressure.
As of writing, the Euro currently trades around the 1.2060 mark against its US counterpart.
15:00 - EUR - ECB President Lagarde Speaks
15:30 - USD - Crude Oil Inventories
19:00 - USD - FOMC Statement
19:00 - USD - Federal Funds Rate
19:30 - USD - FOMC Press Conference
Posted in Daily Market News on Apr 28 2021