Sterling Slides Versus Dollar & Euro

Pound exchange rates falter amid lackluster growth

GBP

The Pound struggled to find a clear direction as the week opened amid a lack of UK economic releases. Meanwhile, an improving appetite for risk saw the increasingly risk-sensitive Pound trade in a wide range against its peers, falling against its riskier rivals, while firming against its safe-haven peers. We have seen Sterling rally against the single currency of late, but fell under the €1.17 handle on Friday. Against the Dollar, Sterling ticked lower last week amid hotter-than-forecast American inflation and shifting interest rate cut bets. The pairing closed the week at around $1.2494 and has ticked lower this morning.

Speaker 12.15: MPC Member Breeden

No Major Data

Euro continues slide versus Dollar but posts small gains over Sterling

EUR

The Euro was mixed this morning as we have seen a strengthening Dollar push EUR/USD under the $1.07 handle, but a small fightback in EUR/GBP was seen end of last week into this mornings trading session. Looking ahead, a top measure of German investor confidence is forecast to show more optimism as major central banks move closer to interest rate cuts. An economists’ poll predicted that the forward-looking economic sentiment reading from the latest survey conducted by Germany’s ZEW economic institute will increase for a fourth straight month with a strong rise to 35.0 points from 31.7 in March. The indicator has more than doubled from the 15.3 points reported in January.

No major data.

US Dollar consolidates gains at multi-month highs

USD

Growing expectations for a delay in the Federal Reserve's (Fed) policy pivot and escalating geopolitical tensions fueled an impressive US Dollar rally last week. After rising over 1.5% in the previous week and touching its highest level since early November, the USD Index stays in a consolidation phase at around 106.00 early Monday. Over the weekend, Iran launched an assault with dozens of drones in retaliation to the suspected Israeli attack on Iran’s consulate in Damascus on 1 April. This also helped the Dollar as it remains a safe-haven currency in times of unease. Meanwhile, UN Secretary-General Antonio Guterres condemned Iran’s drone attacks targeting Israel as a “serious escalation” and called on all sides to show restraint to avoid a devastating regional conflagration.

Data 13.30: Retail Sales m/m expected 0.4% from 0.6%, Core Retail Sales m/m expected 0.5% from 0.3% & Empire State Manufacturing Index expected -5.2 from -20.9.