UK
GBPEUR posted a high of 1.2247 during Friday’s session. The pair traded at a low of 1.2192 before the better than expected UK Retail Sales data at 9.30am, sterling then strengthened in the afternoon on Friday and has since reopened today above the 1.22 levels. UK
GBPEUR posted a high of 1.2247 during Friday’s session. The pair traded at a low of 1.2192 before the better than expected UK Retail Sales data at 9.30am, sterling then strengthened in the afternoon on Friday and has since reopened today above the 1.22 levels.
GBPUSD traded around the 1.6050 until the release of the Retail Sales, sterling proceeded to gain throughout the day and posted a high of 1.6149, and has fallen back below1.61 this morning. Again, the key level for GBPUSD to break now is 1.6165 for further upside potential, until such time we could see this pair remain range bound between the strong support at 1.60 and the resistance at 1.6165.
Focus this week for the UK is the release of the Preliminary GDP figures for Q1, being released on Wednesday morning at 9.30am. Expected to post a 0.1% growth from last quarter’s -0.3%. If we post another negative we are technically in a recession.
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Worldwide
During Friday’s session EURUSD initially posted a low of 1.3127 and rallied throughout the day echoing GBPUSD movement to eventually post a high of 1.3227. However the pair has since fallen and currently resides around the 1.3150 levels finding support around 1.3130.
According to the National Association for Business Economics’ April survey released today, companies are growing more upbeat about the US economy this year and plan to take on more workers as demand improves. 78% of businesses, the most in a year, project the economy will expand more than 2% in 2012. This is up from 65% in the January report.
The US has several high tier data releases this week with Consumer Confidence, New Home Sales and Unemployment Claims all due out. However the two releases of particular note are the FOMC rate statement and press conference Wednesday evening and the Advanced GDP reading on Friday expected at 2.6% from a previous 3.0%.
Results from the first round of French elections yesterday showed that Francois Hollande won 28.6% of the vote against 27.1% for Sarkozy. Hollande’s victory may mean a collapse of the strong cooperation seen previously between Sarkozy and German Chancellor Angela Merkel. The second ballot takes place on May 6th. French bond yields climbed last week, reflecting investor concern that Hollande may relax the nation’s deficit-tackling policy if he takes office.
As global finance chiefs talks ended yesterday in Washington, European Central Bank President Mario Draghi argued the ECB have done enough to stem the debt crisis by cutting interest rates and issuing more long-term bank loans.
The International Monetary Fund Managing Director Christine Lagarde secured $430bn in pledges for the IMF. The meetings ended yesterday in Washington with a doubling of its war chest but worryingly also exposed a number of conflicts among its 188 members. Lagarde fell short of her original $600bn goal as the US declined to chip in, while Canada proposed making it harder for Europe to tap aid.
Eurozone Manufacturing PMI was released this morning at 46.0, forecast was for 48. This figure represents a 5 month low. Eurozone services PMI also fell below forecast of 49.4, posting 47.9.
German Manufacturing PMI fell significantly in April, down to 46.3 from 49.0 in March. This reading was the lowest seen since July 2009. The Services sector remained upbeat in April though, posting 52.6 from 52.1 in March.
AUD weakened after Producer Price Index unexpectedly fell last quarter, adding to expectations the Reserve Bank will cut interest rates.
The preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, rose to a two-month high of 49.1 in April compared with a final reading of 48.3 in March.
