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Rumours of UK summer not enough to pull Pound out of doldrums

Rumours of UK summer not enough to pull Pound out of doldrums

There was no tier one UK data yesterday following the two EU referendum polls released early in the morning. Both polls showed that the UK voters are moving in favour of ‘leave’. Overnight, the British Retail Consortium’s May Retail Sales Monitor showed an increase of 0.5% year-on-year. The increase was mainly due to online consumers preparing for a rumoured UK Summer. Sterling strengthened against the Dollar and the Euro during the Asian market trading hours.

The Dollar was unable to gain any momentum yesterday as Friday’s poor jobs data continues to weigh down the currency. Fed Chair Janet Yellen spoke last night, maintaining that the US would reach the 2% inflation target over the next two years, and that she still expected interest rates to rise.

The Greenback did manage modest gains against the Pound as Brexit concerns continue to worry investors. GBPUSD opened this morning at 1.4441, showing a gain of 0.38% for the Dollar from Monday’s open.

The Dollar traded with little volatility against the Euro as there was no market-changing data released to provide a clear direction for investors. The pair opens today at 1.1355, fractionally above yesterday’s open.

German industrial exports have revealed a surprisingly large drop in demand. Factory Orders fell 2% month-on-month – the biggest monthly fall in nine months and far more than the projected -0.5%. The Euro lost almost half a cent against the Pound, climbing back to 1.2728. The Eurozone 1st Quarter GDP (growth domestic product) is expected to show growth of 1.5% since last year.

Data to watch: 10am EUR GDP Q1 (quarter-on-quarter & year-on-year). 1.30pm US Q1 Nonfarm productivity, Q1 Unit Labour Costs. 8pm US Apr Consumer Credit Change.

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