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Trump turns on Tehran

Trump turns on Tehran

The Halifax house price index tainted Sterling sentiment just after market open yesterday with a 3.1% decline in April, slashing the annual increase to 2.2% from 2.7%. Ratings agency Fitch also stated that UK household finances pose a risk to growth, reinforcing the underlying negative sentiment. The Dollar pushed to retest support below 1.3500 and the Euro peaked below 1.1360, although wider losses meant Sterling pulled back to just above 1.1400 by the 4pm fix.

Thursday’s Bank of England policy decision meant markets were wary of further aggressive Sterling selling and Cable settled just below 1.3550 during New York trading hours. Overnight, BRC retail data printed a 4.2% annual decline in sales from 1.4% previously; much weaker than expected. Part of the decline was due to the timing of Easter but weak underlying sales were also evident.

The Pound was stable as the markets opened, although underlying sentiment remains notably fragile.


The US NFIB (National Federation of Independent Business) small business confidence index rose slightly to 104.8 for April, although this did not meet market expectations despite the survey suggesting companies are recording profits and strong wage pressures.

The JOLTS (Job Openings and Labor Turnover Survey) job-openings data strengthened to a record high of 6.55 million for March and was coupled with consumer confidence increasing within the latest IBD data. The economic data yesterday maintained the current confidence in the US outlook which helped underpin the Greenback.

Outside of data, Federal Reserve chairman Jerome Powell at the Swiss National Bank and International Monetary Fund event stated rate hikes in the US should not disrupt the global economy and that financial markets should not be surprised.

Further, US President Trump walked away from the Iran nuclear deal and will enforce the sanctions placed on Tehran once again. Beyond this, the US Treasury figures will keep the attention of currency traders with an interest in where the Dollar is headed next.

The Dollar pushed the Euro-Dollar exchange rate to fresh lows of this year at 1.1839, while Cable fell to new four-month lows at 1.3487.


The Euro continues to bear the grunt of sellers with EURUSD losing 0.4% yesterday and falling further overnight. The single currency was seeing a paring of short dollar positions which sent the rate to as low as 1.1839.

The Italian Eurosceptic parties are set to put on a good show if Italy goes to vote again, the latest Italian poll by SWG released Tuesday showed. For instance, support for Lega, who wants Italy to leave the EU, has risen to 24.2% from the 17.4%. The shared currency could be in for another round of beating if the Italian-German yield spread widens.

Investors seem to be conveniently ignoring better readings from German data. Industrial production rose 1.0% in March. The market sees the further weakness of the Euro.

Data to watch:

00:01 GBP BRC Like-For-Like Retail Sales (YoY) (Apr)
13:30 USD Producer Price Index ex Food & Energy (YoY) (Apr)
18:15 USD FOMC Member Bostic speech
22:00 NZD RBNZ Rate Statement
22:00 NZD RBNZ Interest Rate Decision
22:00 NZD Monetary Policy Statement
23:00 NZD RBNZ Press Conference

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