Dollar Softens Further

The dollar lost further ground yesterday amidst a light calendar that kept attention on trade headlines. Another quiet calendar day is expected.

Previous Day's Market Highlights

The dollar remained softer yesterday, enabling the pound to hit highs around 1.4160 and the euro to regain the 1.23 handle. Sterling-euro held within the 1.14-1.15 band, failing to break the 1.15 psychological barrier.
 
The pound fared less well against the commodity currencies, which gained as the US dollar weakened. Optimism that a NAFTA deal is approaching has also supported the Canadian dollar, including some reports of a possible deal in principle by the end of the week.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1487 1.1538 1.1255 2.45%
GBP/USD 1.4147 1.4245 1.3874 2.60%
EUR/USD 1.2315 1.2477 1.2218 2.08%
GBP/AUD 1.8284 1.8509 1.7632 4.74%
GBP/NZD 1.9265 1.9644 1.8934 3.61%
GBP/CAD 1.7939 1.8417 1.7831 3.18%

Today's Market Highlights

The pound is a touch higher this morning, in part after hawkish comments from MPC Member McCafferty, who said in an interview with Reuters that the MPC “shouldn’t dally” in raising rates “modestly”. McCafferty was one of two MPC Members who dissented in favour of raising rates in March. Investors anticipate a BoE rate hike in May.
 
The lack of high-level items on the day’s calendar may keep exchange rates in familiar territory. MPC Member Haldane will speak on the role of central banks and societal inequality this morning in Melbourne (10:30 BST). Markets will digest any monetary policy clues. Euro production data unlikely to cause much currency movement. The US releases Producer Price Index data, which also tend to have a relatively muted impact, although signs of rising price pressures generally add to the argument for raising interest rates.

Today's Economic Calendar

Time Currency Release Consensus Previous
09:30 USD Fed's Kaplan Speaks
10:30 GBP MPC Member Haldane Speaks
13:15 CAD Housing Starts s.a. YoY (Mar) 219.0K 229.7K
13:30 USD Core Producer Price Index YoY (Mar) 2.6% 2.5%
13:30 USD PPI YoY (Mar) 2.9% 2.8%
01:30 AUD Westpac Consumer Confidence (Apr) 0.2%
06:00 AUD RBA Governor Lowe Speaks

Caxton