US growth expected to have slowed in Q1

Today's Highlights

Sterling awaits GDP data – forecasts are mixed

US growth expected to have slowed in Q1

Greece story still dominates Euro but data aplenty

FX Market Overview

Tuesday brings the first estimate of UK economic growth in the first quarter of the year. This will very definitely cause volatility because the markets are split over whether the UK economy grew at a faster pace than Q4's 3.0% or slowed. The estimates vary from 3.4% at the top end down to 2.5% at the bottom. Clearly that has huge implications for the value of the Pound and maybe even for the outcome of the election.

This is a big week for the US Dollar. The Federal Reserve will inevitably leave their base rate on hold at 0% to 0.25% when they make that announcement on Wednesday. However, the first estimate of US economic growth is another one where volatility will occur. After GDP growth of 5.0% in Q3 and 2.2% in Q4, there is a strong suspicion that we will see a further contraction in the US economy to 1.0% in Q1. That won't be good for the US Dollar which has been rampant over the last year. That'll be the big news for the US Dollar this week. As the first Friday of May is also the 1st of the month, we will have to wait until the following Friday for the employment report.

Euro traders are spoilt for choice of data this week but, in spite of inflation data, industrial production numbers and unemployment figures, the big story is still whether a deal can be reached with Greece and whether the much hyped 'Grexit' is looming. There are swathes of news stories which are largely opinion pieces about the parlous state of negotiations between the EU and Greece and that tongue-wagging is enough to keep the euro weak. A deal - if that is possible - would immediately strengthen the euro so beware if you are a Euro buyer. However, news of a falling out and possible Greek exit from the Euro would have the opposite effect. All to play for then.

Amongst the other big stories of this week is the interest rate decision from the Reserve Bank of New Zealand. We have been getting mixed messages from the RBNZ about their fears over the housing market boom along with contrarian hints of further monetary support for the economy. It would be a neat trick if they could stimulate the economy without fuelling the housing boom so we will listen to their press statement with interest.
The Kiwi Dollar is flirting with NZ$2.00 to the Pound again.

And in a very public 'ooops' moment, HSBC Hong Kong has had to apologise after a page in the Community Projects section of their website directed visitors to an 'adult' site featuring scantily clad women. Maybe not the sort of community project we would have expected but maybe it has something to do with exposure or something.