Markets on hold
All rather subdued in the FX markets at the moment. It seems traders are reluctant to take further positions ahead of tomorrow’s key Fed rate meeting when investors will be expecting more clarity on the Fed’s QE policy.
There was further good news yesterday for the US housing market. According to the National Association of Home Builders, confidence for newly-built single-family homes surged to 52 in June from 44 in the previous month. Any reading over 50 indicates that more builders view sales conditions as good than poor and this is the first reading above 50 since April 2006. All positive signs the US economy is starting to turn.
After last month’s surprise fall in UK inflation for April, Sterling will be sensitive to any unexpected news this morning.
The Pound held onto recent gains during the London session, trading around $1.57 with the Dollar, although slipping a little to $1.5650 this morning. GBP/EUR closed at €1.1760 while EUR/USD held in a relatively tight range consolidating around $1.3360.