GBP/USD pops through 1.50 as the dollar continues to fall

United States Dollar:

The US dollar was sold off again yesterday owing to yet more weak U.S. data. Building permits rose less than forecast in March and housing starts climbed only 2% to 926,000. Weekly unemployment claims also increased by more than expected. There were also quite a few Fed members on the wires yesterday, the main one being vice chair Stanley Fischer. He said that lift-off would probably happen in 2015, but it didn’t specify any particular month. In that respect, a June rate hike is looking less and less likely, especially as US data continues to disappoint. Fischer also said yesterday that he didn’t see inflation rising beyond 2% for at least 2 years which further undermined the greenback. The dollar continued to trade with an offered tone through the afternoon session despite the release of better than expected Philly Fed Manufacturing data – the index for April printed at 7.5 against expectations for 6.5. UK average earnings and employment data was released this morning at 9:30 and came in a little shy of expectations. February earnings rose 1.7% and March’s claimant count change came in at -20.7k vs. expectations for -29.5k. GBP/USD has been unaffected and continues to knock on the door of 1.50, opening in London at 1.4980.

We expect a range today in the GBP/USD rate of 1.4950 to 1.5060.

Euro:

The dollar weakened across the board yesterday, including against the euro. EUR/USD rallied up through 1.0800, this after starting the day closer to the 1.06 big figure. It topped out at 1.0810 but remains on the front foot this morning at 1.0797. European inflation data is due later this morning, but given the trend and sentiment towards the dollar at present, it might not actually have too much of an impact on the euro crosses. Meanwhile, GBP/EUR has remained stable throughout the last 24 hours and trades at 1.3880 currently.

We expect a range today in the GBP/EUR rate of 1.3850 to 1.3945.

Aussie and Kiwi Dollars:

AUD and NZD are both higher against the dollar this morning, as are most major currencies. However, there are some risks early next week to the currencies, this being NZ inflation data and a speech by RBA Governor Stevens, both on Monday. NZ data is likely to print soft, but the RBNZ is still likely to have a headache around rising house price pressures, which could mean the OCR is likely to remain stable throughout the rest of the year. They trade in London this morning at .7815 and .7695 respectively.

We expect a range today in the GBP/AUD rate of 1.9150 to 1.9300.

We expect a range today in the GBP/NZD rate of 1.9400 to 1.9620.

Data releases for the next 24 hours:

AUD: No data

EUR: Final CPI y/y

GBP: No data

NZD: No data

USD: CPI m/m, Core CPI m/m, Prelim UoM Consumer Sentiment, CB Leading Index m/m, Prelim UoM Inflation Expectations