GBP/EUR Above 1.15 as GBP Rallies

Sterling rallied yesterday, hitting fresh highs against the euro and the dollar. Investors will watch to see if it can maintain those gains.

Previous Day's Market Highlights

It was another positive day for sterling yesterday as the pound rallied, hitting highs against the euro above 1.15 and against the dollar above 1.42. A softer euro lost ground against the dollar as well, as euro-dollar fell towards 1.23. Industrial Production declined 0.8% month on month, putting pressure on the single currency in the morning session, while trade war concerns and the currency’s strength were highlighted in the ECB’s meeting accounts.  
 
Weekly US Initial Jobless Claims were a touch higher than projected, although still well below the 300K level consistent with an improving labour market, and the release had limited impact on the dollar. The calendar was overall relatively light.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1564 1.1565 1.1314 2.17%
GBP/USD 1.4252 1.4253 1.3888 2.56%
EUR/USD 1.2323 1.2477 1.2218 2.08%
GBP/AUD 1.8291 1.8509 1.7867 3.47%
GBP/NZD 1.9290 1.9644 1.9171 2.41%
GBP/CAD 1.7922 1.8417 1.7817 3.26%

Today's Market Highlights

After holding onto gains overnight, the pound is trading in the upper half of the 1.15-1.16 band against the euro this morning, its highest levels since late May 2017, around 11 months. It’s performing well against the dollar as well, having broken 1.4250 for the first time since 2 February.
 
The calendar is quiet for the pound today, which means investors will be watching to see if sterling can maintain its recent gains. The euro could strengthen slightly on a higher trade surplus this morning (10:00 BST), although the release may overall have a relatively contained impact.
 
In the afternoon, the US releases the preliminary Michigan Consumer Sentiment Index, which is projected to slip back but to remain above the 100 level. There are also several Fed speakers on the calendar, including Rosengren (13:00 BST), who will be speak on the economic outlook, while Bullard will speak on living standards in the US (14:00 BST) and Kaplan is to speak in Odessa (17:00 BST).
 
Looking ahead, highlights next week include the latest employment and inflation data from the UK, US Retail Sales, final Eurozone CPI, and the Bank of Canada’s monetary policy meeting. Markets will continue to keep an eye on any geopolitical developments.

Today's Economic Calendar

Time Currency Release Consensus Previous
10:00 EUR Trade Balance s.a. (Feb) €20.2B €19.9B
10:00 EUR Trade Balance n.s.a. (Feb) €16.6B €3.3B
13:00 USD Fed's Rosengren Speaks
14:00 USD Fed's Bullard Speaks
15:00 USD Prelim Michigan Consumer Sentiment Index (Apr) 100.5 101.4
18:00 USD Fed's Kaplan Speaks

Caxton