UK
GBPEUR reached a 19-month high of 1.2250 and traded above the 1.22 level throughout the session on speculation the Bank of England will pause its stimulus program next month. The mid-range resistance at 1.2235 was broken yesterday, so a test of the next level at 1.2285 could come during today\’s session.
GBPUSD followed suit and hit a 5-month high of 1.6076 and traded above the psychological 1.60 level throughout the session. After successfully breaking the resistance at 1.6070, gains may be capped around the 1.6150 level and sterling has strong support now at 1.60, so the pair may be rangebound during the coming session.
Following on from Wednesday’s gains against the AUD sterling hit a fresh high of 1.5565 yesterday, the highest level seen since Dec 21st 2011.
This morning UK Retail Sales YoY for March came in at 3.3% against forecast of 1.3%. This much better than expected data has caused GBPUSD to rally 30 points to 1.6121.
________________________________________
Worldwide
Consumer confidence in the Eurozone fell in April to -19.8 as fears that the region has re-entered recession in the first quarter of the year grow.
US Existing home sales fell in March for the second-straight month, a sign that the housing market\’s long-awaited recovery may be flagging. US unemployment rose to its highest level since January and the Philadelphia Fed said its index of general business activity within the factory sector fell to 8.5 in April from 12.5 in March. However, the index of leading economic indicators in March posted the sixth increase in a row suggesting continued economic momentum.
EURUSD opened trading at 1.3134 yesterday and tested the support levels around 1.3074 before the Spanish and French bond auctions began. After the 2pm release of US data, EURUSD went on to a high of 1.3151 and is still trading around that level this morning. The next technical level to break at close is 1.3070 for any more downside trends.
During yesterday\’s critical bond auctions, Spain sold €2.54bn in 2 and 10 year bonds, slightly more than the target of €2.5bn. France sold €8bn in debt as risks linked to the French presidential election drove up yields.
German PPI came in better than expected this morning. Unlike some of the Eurozone countries which are currently struggling, Germany are expected to post growth figures of 0.9% for 2012, an increase from the previous published figure of a fall of 0.8%, with GDP expected to increase by 2%.
Japan reported the fastest export growth in a year the figure which was boosted by car exports to the US and a smaller-than-expected trade deficit, aiding prospects of a sustained recovery in the world’s third-biggest economy.
The yen weakened against all 16 of its most traded peers as Bank of Japan officials signalled they’ll keep acting to depreciate the currency. Japanese policy makers will meet on April 27 amid speculation they will expand the BoJ asset-purchase fund for the second time in three months.
