Previous Day's Market Highlights
Sterling received a boost from an above-forecast Public Sector Net Borrowing release and improved investment sentiment yesterday, holding 1.14 against the euro and picking up within the 1.39-1.40 band against the dollar after hitting a one-month low. However, the dollar remained broadly firmer as 10-year yields hit 3% for the first time in four years. Gains in both Consumer Confidence and house price index figures generally supported the greenback but had limited direct market impact. Earlier in the day, German Ifo Business Climate data disappointed but had limited impact on the euro.
The commodity currencies extended losses as the dollar remained firm. Sterling-kiwi broke 1.97 overnight, the rate’s highest levels in four months. Expectations that the RBNZ will keep interest rates on hold given softer inflation have also weighed on the kiwi.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
It’s a quiet calendar day before the end of the week, which leaves attention largely on the dollar and treasury yields for any further gains. Otherwise, exchange rates may remain around familiar levels. The US releases MBA Mortgage Applications (12:00 BST), which will likely have limited market impact. Sterling will keep an eye on any Brexit headlines with an empty data calendar.
Canadian dollar traders will keep an eye on weekly EIA Crude Oil Inventories and a speech from BoC Governor Poloz, who testifies before the Standing Senate Committee on Banking, Trade and Commerce. He is unlikely to deviate from the cautious tone he struck on future rate hikes earlier in the week. Therefore, the speech may have limited impact on the Canadian dollar but could pose a downside risk.
Tomorrow, the ECB is expected to keep interest rates on hold. Investors will keep a close eye on the ECB’s latest thinking after headline inflation rose only to 1.3% in March. If Draghi remains relatively cautious, the euro could weaken, while any upbeat signals could trigger speculation of the winding down of QE later in the year and therefore euro strength. Q1 GDP figures from the UK and the US round out the calendar on Friday, with the potential for both economies to have grown at a slower pace than in Q4.
Today's Economic Calendar
|12:00||USD||MBA Mortgage Applications||4.9%|
|15:30||USD||EIA Crude Oil Inventories (20 April)||-2.648M||-1.071M|
|21:15||CAD||BoC Governor Poloz Speaks|