Pound Holds Gains

A softer EUR saw GBP briefly break €1.13 while USD pushed back from lows.

Previous Day's Market Highlights

The dollar remained broadly weak but saw a slight pull-back against the pound towards 1.3950 from overnight tests of 1.40, while euro-dollar pulled back from 1.24 towards 1.2350. The euro was softer following cautious central bank comments, which helped sterling-euro test and finally break 1.13, if only briefly. Political uncertainties remain risks for the pound.
 
Elsewhere, US Retail Sales were a mixed bag, core sales rising compared to the previous month but not as much as expected, while headline sales again fell. This did little to support the dollar, which in the afternoon reversed earlier gains against the pound.
 
Looking at the commodity currencies, the pound continues to trade at its highest levels against the Canadian dollar since the referendum, although it fell back from a fresh high above 1.81. Sterling made gains against the kiwi dollar above 1.91 overnight after Q4 GDP came in below forecasts. It fared less well against the Australian dollar, initially reversing an overnight test of 1.78 to head back down towards 1.77.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1299 1.1399 1.1150 2.18%
GBP/USD 1.3976 1.4150 1.3711 3.10%
EUR/USD 1.2369 1.2556 1.2154 3.20%
GBP/AUD 1.7768 1.7913 1.7599 1.75%
GBP/NZD 1.9095 1.9280 1.8904 1.95%
GBP/CAD 1.8102 1.8131 1.7484 3.57%

Today's Market Highlights

It’s a quieter day again today with the major US data of the week out of the way. Mid-level releases include NY and Philadelphia Manufacturing data and weekly Initial JoblessClaims, forecast to fall back below 230K and in any case stay well clear of the 300K level consistent with a strengthening labour market. Sterling will remain sensitive to any Brexit headlines ahead of next week’s EU Summit.
 
ECB speakers continue with a speech from Lautenschläger at the Florence School of Banking and Finance (15:45 GMT). New Zealand Business PMI figures could see some kiwi movement overnight. RBA Deputy Governor Debelle will later give a speech titled “Risk and return in a low rate environment”.
 
Tomorrow we’ll have final Eurozone CPI figures, which are expected to confirm that headline inflation slowed to 1.2%. US releases include housing and industrial production data.

Today's Economic Calendar

Time Currency Release Consensus Previous
12:30 USD NY Empire State Manufacturing Index (Mar) 15.0 13.1
12:30 USD Initial Jobless Claims (9 Mar) 226K 231K
12:30 USD Philadelphia Fed Manufacturing Survey (Mar) 23.0 25.8
15:45 EUR ECB's Lautenschlager Speaks
21:30 NZD Business NZ PMI (Mar) 55.6
22:45 AUD RBA Assist Gov Debelle Speaks

Caxton