Sterling rose above the 1.3900 to the Dollar after yesterday’s open but failed to sustain the move as the Dollar fought back across the board. There was some caution in light of next week’s Bank of England policy meeting and Monetary Policy Report. It doesn’t appear that the Government’s current pickle is having any significant market impact at present but expectations of a strong SNP performance at next week's Scottish elections is causing some pause for thought.
The Euro hit selling pressure when dipping much below 1.1500 and narrow trading ranges prevailed. Equity markets gained after the US open which supported the Pound enough to settle near 1.3900.
This morning the Pounds opens just below 1.3900 to the Dollar and the Euro just below 1.1500.
US durable goods orders increased 0.5% for March after a revised 0.9% decline the previous month, but well below consensus forecasts of a 2.5% increase. Underlying orders increased 1.6% on the month which met market expectations and there was little impact from the data.
There was an element of caution ahead of Wednesday’s Federal Reserve (Fed) policy statement even though markets expect that the statement will be little changed from the previous month. Expectations of sustained dovish rhetoric from Chair Powell continued to curb underlying dollar support.
The Dallas Fed manufacturing index strengthened to 37.3 for April from 28.9 previously. Wages increased at a faster rate on the month and pricing pressures increased.
The data continued to fuel expectations that underlying inflation pressures were increasing in the economy.
The Euro printed a fresh daily low at 1.2060 before rebounding and rising above the 1.2090 area against the Dollar. Earlier on Monday, the pair climbed to 1.2116, reaching its highest level in two months.
After the better than expected PMI data released last week, there was some disappointment over the IFO data with the single currency losing momentum following the release. There were also reports that the German government will raise the 2021 GDP growth forecast to 3.5% from 3.0%.
As of writing, the Euro currently trades around the 1.2070 mark against its US counterpart.
Data to watch
12:00 - All Currencies - OPEC-JMMC Meetings
15:00 - USD - CB Consumer Confidence
Posted in Daily Market News on Apr 27 2021