Dollar continues to strengthen post FOMC minutes

United States Dollar:

GBP/USD has fallen throughout the last 24 hours. It was knocked lower early on Thursday morning following the release of weaker than expected UK trade data. This data showed that Britain’s trade deficit widened to a seven month high in February to £10.34 billion vs. expectations for -£8.9 billion. Meanwhile, the dollar continued to strengthen after the release of FOMC minutes, which indicated that there were still some Fed members that were in favour of a rate hike in June. A steady sell-off in EUR/USD also weighed on cable whilst UK election jitters simmer away in the background. GBP/USD fell to a low of 1.4686 yesterday and it’s coming under pressure again this morning, opening at 1.4680. In other news yesterday, the Bank of England announced that it would be leaving interest rates on hold - a complete non-surprise. UK manufacturing and industrial production data are due this morning. There isn’t too much due out from the U.S. although a couple of Fed speakers are due.

We expect a range today in the GBP/USD rate of 1.4640 to 1.4745.

Euro: The ECB expanded the cash available to Greek lenders through emergency lending assistance yesterday but only by a marginal €1.2 billion. According to officials, this will only just cover the cash flow requirements of Greece’s credit system. The news weighed on the euro and combined with other worries about Greece the single currency got caught up in a wave of fresh offers. Meanwhile, German trade data printed a little weaker than expected which didn’t particularly help the euro’s cause. EUR/USD has slipped from 1.0778 to this morning’s opening level of 1.0620. It’s fallen vs. the pound too and GBP/EUR trades at 1.3820.

We expect a range today in the GBP/EUR rate of 1.3780 to 1.3890.

Aussie and Kiwi Dollars:

The Australian dollar has trended lower vs. the USD over the last few trading sessions. Increased concerns over China and the continued decline in iron ore prices are weighing on the unit. The stronger than expected Chinese inflation numbers – released overnight – were also a negative for the AUD which opens in London at .7685 vs. the US dollar. NZD/USD has been pretty much range bound. At one stage yesterday it looked as though it might make a sustained break of .76 but it failed and after making another attempt overnight it has drifted back to open this morning at .7545. GBP/AUD and GBP/NZD sit at 1.9120 and 1.9460 respectively.

We expect a range today in the GBP/AUD rate of 1.9050 to 1.9210.

We expect a range today in the GBP/NZD rate of 1.9380 to 1.9550.

Data releases for the next 24 hours:

AUD: No data

EUR: No data

GBP: Manufacturing Production m/m, Construction Output m/m, Industrial Production m/m, NIESR GDP Estimate

NZD: No data

USD: FOMC Member Lacker Speaks, Import Prices m/m