United States Dollar:
The dollar was sold off as the New York session started yesterday. There wasn’t much by way of data; U.S. flash services PMI printed a little weaker than expected but that was about it as far as data was concerned. GBP/USD in particular was a standout yesterday – it rallied from 1.5110 to a high of 1.5260 and opened this morning close to this level. It has fallen back since 9:30am however, a reaction to weaker than expected UK prelim GDP data. The data has shown that the UK economy grew by 0.3% in the January-March period against expectations for 0.5%, the slowest growth since the fourth quarter of 2012 and an obvious kick in the teeth for David Cameron’s government in the run up to the national election next month. GBP/USD has fallen back under 1.52 and now trades at 1.5180, with the data likely to weigh further on the pound as the morning goes on.
We expect a range today in the GBP/USD rate of 1.5100 to 1.5220.
Euro:
EUR/USD tracked cable higher yesterday and climbed off of 1.0820 to a high of 1.0925. Markets were relieved to hear that Greek finance minister Varoufakis has been replaced as co-ordinator of day-to-day contacts with the country’s creditors. The minister of international financial relations, Euclid Tsakalotos, will take over this role and markets - including the FTSE - reacted positively. It was supportive of the single currency too, although the Greek government insists that Varoufakis will still be overseeing the negotiations. As for data, the docket was a bit thin and there isn’t much due out today either. Investors will instead be looking to the States for CB consumer confidence and Richmond manufacturing index. We expect a range today in the GBP/EUR rate of 1.3910 to 1.3980.
Aussie and Kiwi Dollars:
RBA Governor Stevens was speaking last night but did not make reference to monetary policy. The aussie dollar has pushed higher, but it’s largely a result of a weaker USD. NZD/USD has gone the same way, rallying on New York open yesterday and trading to a high of .7665 (up from .7590). There wasn’t any data released from New Zealand overnight. Meanwhile, GBP/AUD and GBP/NZD open in London at 1.9240 and 1.9855.
We expect a range today in the GBP/AUD rate of 1.9150 to 1.9320.
We expect a range today in the GBP/NZD rate of 1.9750 to 1.9900.
Data releases for the next 24 hours:
AUD: No data
EUR: No data
GBP: No data
NZD: Trade Balance, ANZ Business Confidence
USD: S&P/CS Composite-20 HPI y/y, CB Consumer Confidence, Richmond Manufacturing Index
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