Can we bank on this Sterling recovery?
The Easter weekend saw gains for Sterling against the Dollar despite thin volumes. As the British market re-opens this morning – GBPUSD is at 1.4200, up from the 1.4050 close on Thursday. The spike is being viewed with skepticism by traders as ‘Brexit’ fears remain strong. The Pound saw minimal gains against the Euro over the weekend, and a quiet data day today in the UK will likely lead to sentiment being responsible for market movement.
The US market was open yesterday, and the Dollar lost ground against the Euro and the Pound, fuelled by the Personal Consumption Expenditure (inflation) printing slightly worse than expected. The Personal Consumption Expenditure month-on-month figure fell by 0.2% and the Pending Home Sales year-on-year number fell to 0.7% from 1.4%.
Janet Yellen will deliver a speech on “Economic Outlook and Monetary Policy” in New York today. Investors will look to the tone of the meeting to provide support (or not) for the Dollar in the lead up to Friday’s Nonfarm Payrolls data.
The single currency will turn to general market sentiment for direction as there is no significant data in the Eurozone today. GBPEUR has seen a steady rise over the weekend of 0.6% and is trading back above the 1.2700 level.
EURUSD opened yesterday at 1.1164 before the US data pushed the pair higher to find resistance at 1.1220. After some Dollar demand in the US trading session the pair opened up this morning at 1.1196.
Data to watch: 3pm US Consumer Confidence (Mar). 5.20pm US Janet Yellen’s Economic Outlook and Monetary Policy speech.