Home > Resource Hub > Daily Market News > Sterling sees 10-week highs against the Dollar

Sterling sees 10-week highs against the Dollar

Sterling sees 10-week highs against the Dollar

Sterling maintained confidence throughout the day yesterday, pushing to 10-week highs against the Dollar. President Obama’s call for the UK to stay in the EU meant market sentiment continued to improve, with Cable briefly peaking at 1.4519.

Bank of England Deputy Governor Jon Cunliffe is due to speak at a lecture this evening after the European close. Any hawkish comments made will likely further push Sterling strength ahead of preliminary GDP figures due for release tomorrow morning.

The Euro showed continued signs of weakness in yesterday’s trading session as data from Germany came in below expectations. The IFO survey results for April, which sum up the German economy’s current situation, as well as its expectations both printed negative and resulted in the GBPEUR trading higher at around the mid 1.28 levels.

Amid a lack of significant fundamental drivers for both the UK and Europe market sentiment will likely drive volatility today.

US new home sales disappointed in March, declining to an annual rate of 511,000 from 519,000 previously, although the market impact was limited. Wednesday’s Federal Reserve statement is approaching and there is a general mood of caution leading up to it. There are no expectations of a rate hike, but a more hawkish tone is expected as financial conditions have improved and the Fed will want to keep its options open for June’s decision at this stage.

Cable broke through the 1.4500 level for the first time since mid March, as the Federal Open Market Committee meeting on Wednesday continues to undermine any Dollar strength. The Dollar bulls did claw back some ground in the US session, and it opened this morning at 1.4483. EURUSD posted small gains yesterday on the Dollar weakness, but volatility for the pair was limited. It opened this morning at 1.1266, up 0.40% from Monday’s open.

Data to watch: 1.30pm US Durable Goods Orders (Mar). 2.45pm US Markit Composite & Services PMI (Apr).

Share this case study
Set yourself up in minutes, make payments the same day: it’s free, easy and without obligation.