Today’s rate 1.1946 @ 08:00 Today
Keep an eye on the currency markets with up to date information on currency exchange rates. Here we provide a brief summary of the latest GBP/EUR exchange rate news and highlights.
Morning Report 21.04.2017
Markets Look to UK Retail Sales, Await French Elections
Alexandra Russell-Oliver, FX Analyst & Moneycorp Dealer Team
- Yesterday’s Market Highlights
The euro met resistance against the dollar around 1.0777 before correcting lower. Sterling-dollar followed suit, briefly dropping below 1.2800 before recovering higher in the afternoon session. Sterling-euro briefly fell below 1.1900 before regaining the big figure.
Eurozone Consumer Confidence picked up more than forecast from -5.0 to -3.6. The release contributed to euro strength yesterday morning, as did positioning ahead of Sunday’s elections as polls showed a stronger lead for Macron.
Weekly Initial Jobless Claims rose from 234K to 244K, slightly above expectations but well below the key 300K level consistent with a strengthening labour market. The Philadelphia Fed Manufacturing Survey dropped from 32.8 in March to 22.0 in April.
The kiwi dollar reversed gains made on above-forecast Q1 CPI data heading into Thursday’s session.
GBP/EUR: Currently trading at 1.1946 @ 08:00 Today
- Today’s Market Highlights – Looking Ahead
The euro remains in focus as investors look ahead to Sunday’s French elections. While investors expect an ultimate Macron victory, there is always the risk of a surprise. The euro could weaken if both Le Pen and Melenchon make it through to the final round.
The UK releases March Retail Sales, which are forecast to decline on a monthly basis and slow on an annual basis (09:30 BST). A disappointing release could weigh on the pound.
In the afternoon, Canada releases CPI data (13:30 BST). Lower figures could weigh on the Canadian dollar. The US releases preliminary Markit Manufacturing and Services PMIs and Existing Home Sales (14:45, 15:00 BST).
The IMF and World Bank begin their spring meetings in Washington. Markets will keep a close eye on any headlines, including discussion of protectionism.
- Today’s Market Highlights – Looking Ahead
Sterling banks its gains
After Tuesday’s feeding frenzy there was a lot of sitting back and taking stock going on yesterday. The pound was unchanged, on average, against the other dozen most actively-traded currencies. Just 1% separated the leading South African rand and the lagging Norwegian krone.
The rand edged ahead after South African data showed inflation slowing from 6.3% to 6.1%. It strengthened by 0.4% against sterling. At the back of the field the krone was down by -0.6%, the victim of a -4% fall in oil prices. The Canadian dollar was not far ahead of it, losing three quarters of a cent for the same reason. The euro, the Swiss franc and the Swedish krona shared second place, adding a quarter of a euro cent or equivalent.
Sterling showed an early inclination to fade but, perhaps surprisingly, investors made no serious attempt to correct Tuesday’s rise. The implication is that they continue to believe that a reinforced parliamentary majority will allow the prime minister to secure a more beneficial (or at least a less disadvantageous) Brexit deal.
An unexpectedly imminent UK election and a surprisingly strong sterling served to distract investors from their usual focus on politics and statistics. Not that there was much to say about either: the French election race is still a close one and the ecostats were mostly uncontroversial.
The one that wasn’t was the NZ consumer price index. Prices rose by 1.0% in the first quarter, lifting the headline rate of inflation from 1.3% to 2.2%. It was a bigger number than investors had expected and was worth an immediate cent to the Kiwi. Later erosion cost it half that gain and the NZ dollar was eventually just a dozen ticks ahead on the day.
Euro zone inflation came in at 1.5%, unchanged on the month and exactly in line with the provisional figure. Euroland’s trade surplus widened to a seasonally-adjusted €19.2bn and Japan’s shrunk to ¥172bn: both figures were better than forecast. The US Federal Reserve’s Summary of Commentary on Current Economic Conditions (commonly known as the Beige Book, because it is) was a little more upbeat than the recent data might have suggested.
Ecostats are few today but will be picking up the pace on Friday. The day’s highlights are likely to be speeches by Bank of England governor Mark Carney and US treasury secretary Steve Mnuchin.
The two gentlemen will be addressing an Institute of International Finance gathering this evening and attending the G20/IMF finance ministers and central bank governors’ meeting tomorrow.
Friday’s most important economic statistics will be the provisional purchasing managers’ index readings and the US retail sales figures for March. Sales are forecast to have fallen slightly on the month, principally because the Easter holiday was moved from March to April this year. Canadian inflation data, which appear after lunch tomorrow, are expected to show prices rising by 1.8% a year, a slightly slower pace than the 2.0% reported previously.
Weekly Market Updates: Week-ending 07-04-2017
There was little net change for the euro against the pound and the dollar. It strengthened by quarter of a US cent and lost a fifth of a cent to sterling. That is not to say the week was entirely uneventful. Last Friday the pound extended the rally that had begun after Britain’s prime minister sent her Article 50 divorce letter to Brussels. The pound’s climb was the result of further unwinding of short positions by investors.
There were more reminders of how monetary policy is pointing in opposite directions on opposite sides of the Atlantic. Mario Draghi at the European Central Bank said for the umpteenth time that it is too soon to reduce stimulus. The Federal Open Market Committee talked of more rate increases and said it was time to think about reducing its stock of bonds, thereby further tightening monetary policy.