GBP: No help forthcoming
EUR: Should take 1.20 today
USD: Crucial retail sales figures this afternoon
Sterling
Sterling is trading like a currency that is not getting much help at the moment and in all likelihood will break to fresh lows against the single currency over the course of the day. As we noted earlier in the week, the data calendar has little for sterling until next Tuesday/Wednesday with job and inflation data due. Higher readings on wages and inflation could help sterling on the basis that the Bank of England may feel that the UK recovery is recovering quicker than estimated, although with their most hawkish member leaving the fold in the coming months, even that may be a stretch.
Euro
EURUSD hasn’t broken above the 1.20 level quite yet, a level it has not seen since the first week of March. Given markets are no longer focused on the EU vaccine story, we can see the euro extending itself back towards the 1.21-1.22 area in the coming weeks.
US dollar
Markets are prepared for a blowout retail sales from the US later today, powered by stimulus cheques that landed in US consumers’ bank accounts last month. Where the spending is focused is almost more important than the overall level of spending; if those from lower socioeconomic backgrounds are spending money away from food and fuel, then investors are going to be happier to say the US consumer is back.
Earnings news from some of the largest banks on Wall St supported the general environment of risk positivity yesterday although lending and credit card business levels were lower; consumers are getting the money they need from the stimulus cheques.
Anything towards a double digit increase in sales compared to February will be taken very positively by markets and could lead to a decent run higher for the USD.
Retail sales numbers come out alongside the weekly jobless claims numbers at 13.30.
Elsewhere
The Australian dollar paused its recent run higher following some weaker than expected jobless numbers. Given the positive risk environment overnight, the NZD is the best performing currency currently.
Market rates
Today’s interbank rates at 08:21 against sterling. Movement vs yesterday.
| Euro | €1.150 ↓ |
| US dollar | $1.379 ↑ |
| Australian dollar | $1.781 ↓ |
| South African rand | R19.74 ↓ |
| Japanese yen | ¥150.1 ↓ |
Have a great day everyone.
