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Dovish ECB Minutes Weigh Heavily on Euro Demand

Pound News: Stagnating UK House Prices Fail to Dent BoE Rate Hike Bets

Investors were not impressed to find that the RICS house price balance had stagnated once again in March, pointing towards a continued softening of the UK housing market.

However, this failed to keep the Pound (GBP) on a weaker footing on Thursday afternoon as markets remain confident in the prospect of a May interest rate hike from the Bank of England (BoE).

Even so, with no new UK data due for release today GBP exchange rates could struggle to hold onto any particular bullishness for long.

 

Euro News: Signs Continue to Point Towards Softening Eurozone Economic Growth

The mood towards the Euro (EUR) soured further as February’s Eurozone industrial production data showed a surprise -0.8% contraction on the month.

Demand for the single currency weakened significantly in the wake of the European Central Bank’s (ECB) March meeting minutes, which proved more dovish than anticipated.

If the Eurozone trade surplus widens on the month, though, this could offer EUR exchange rates some support ahead of the weekend.

 

US Dollar News: Underwhelming Jobless Claims Data Unable to Hold Down USD

Reaction to the Federal Open Market Committee (FOMC) meeting minutes proved a little limited yesterday, leaving the US Dollar (USD) on a weaker footing.

Nevertheless, even as the latest jobless claims data proved disappointing, USD exchange rates recovered ground over the course of the afternoon thanks to the weaker Euro.

With the University of Michigan sentiment index expected to show a dip on the month, however, the US Dollar could come under fresh pressure this afternoon.

 

Canadian Dollar News: Investors Discouraged by New Housing Price Index Contraction

Bullish oil prices failed to keep the Canadian Dollar (CAD) on an uptrend, even as global geopolitical tensions kept Brent crude trending above the psychologically important US$70 per barrel mark.

Confidence in the Canadian economy took a fresh blow as February’s new housing price index showed a surprise -0.2% contraction on the month.

If today’s existing home sales figure also demonstrates weakness this could see CAD exchange rates slump sharply.

 

Australian Dollar News: Solid Inflation Expectations Failed to Support ‘Aussie’

Solid Australian consumer inflation expectations were not enough to trigger a fresh Australian Dollar (AUD) exchange rate rally.

While the measure continues to run well above the Reserve Bank of Australia’s (RBA) 2% target this is unlikely to alter the odds of policymakers taking a more hawkish outlook in the near future.

Any detetioration in market risk appetite could weigh heavily on the ‘Aussie’, with global geopolitical tensions still looking rather volatile.

 

Upcoming Data

Friday, 13 April

10:00     Eurozone Trade Balance

14:00     Canada Existing Home Sales

15:00     US University of Michigan Sentiment Index

 

Thomas Taylor

Currency Dealer 

tnt@fcgworld.co.uk

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