Sterling overbought ahead of credit data

Today's Highlights

Sterling overbought ahead of credit data

US growth slows faster than forecast

Canadian growth due, forecasts are mixed

FX Market Overview

Investors are nervous. Gold is at a 7 week high as the safety of its intrinsic value lures people away from equities and bonds and, with bond yields so low, that isn't so surprising. The nervousness stems from commodity prices bumping along the bottom of their range, a lack of economic growth anywhere and central banks that can't decide whether to raise, lower or leave interest rates alone. Most are opting for the latter course of action because to do anything else just attracts heaps of criticism.

So with that nervousness in mind, the slight recovery of the Pound makes a little sense. At 2.1% annual economic growth, the UK is in stellar form compared to other economies. The US data, released yesterday, showed America's growth missed the forecasts and fell to just 0.5% growth in the first 3 months of 2016, after growing at 1.4% in Q4. The US Dollar was weakened by the news. However, this afternoon's personal income and expenditure data is expected to be rather more upbeat, so this may well be an opportunity for US Dollar buyers to take advantage before noon.

For the UK, the risk of an exit from the European Union appears to have ebbed somewhat. London is a massive financial centre so it attracts investors and relative to other big cities around the world so UK property prices are still pretty affordable. This morning's credit and mortgage data will, I suspect, paint a picture of slowing activity even though the major forecasters are looking for minor increases. The Pound is holding its own but is heavily overbought from a technical perspective, so there is probably more scope for GBP weakness than strength in the short term.

This afternoon brings Canadian economic growth data and the forecast are very mixed. There is no doubt we will get volatility around those numbers, so if you buy or sell Canadian Dollars, an automated order may be just the tool you need today.

And in other news, anyone who rents a home now has a twitter voice to rant about the sky-high cost and the poor service from landlords. #VentYourRent is the hashtag for all this activity and some of the tweets are just plain disgusting whilst others are very funny indeed.

I hope you have a great long weekend. May Day holds all sorts of celebrations from armament parades to fetes and from anarchist processions to pole dancing from a more innocent age. Enjoy.