Pound Steadies as Traders await Retail Sales Data, Euro Gains ahead of Riga and US Dollar Softens on Dovish Fed

Published: 21 May at 10 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, France, Germany, Greece,

Pound Sterling (GBP)
Having rallied significantly in response to relatively hawkish minutes from the Bank of England’s (BoE) most recent policy meeting, the Pound has steadied on Thursday. Monetary Policy Committee (MPC) minutes showed that policymakers expected the slack in the British economy to dissipate within a year. This would prompt a rise in inflation which would be accompanied by a tighter monetary policy.
As traders await Retail Sales data, due for publication later on Thursday morning, the Pound is generally trending statically versus its major peers. A fractional declination can be attributed to poor data out of Germany which could impact upon British trade.

Euro (EUR)
Although European data generally printed poorly on Thursday, the common currency strengthened versus many of its currency competitors. The appreciation is likely to be speculation that the meeting between Greek and Eurozone officials in Riga tonight will see the Hellenic nation come closer to securing bailout funds.
German Manufacturing, Services and Composite PMIs all failed to meet with median market forecast growth. Additionally, French manufacturing remained in contraction territory.

US Dollar (USD)
After a recent rally in response to some positive data, the US Dollar fell off its perch after minutes from the most recent Federal Open Market Committee (FOMC) meeting read dovishly. The minutes showed that the likelihood of a June liftoff is slim-to-none. Additionally, policy makers expected only ‘moderate growth’ in the second half of the year.
US labour market data, due for publication later on Thursday afternoon, will be of significance. Hawks will be hoping for positive results to reignite the US Dollar rally.

Australian Dollar (AUD)
The softer US Dollar saw heightened demand for high-yielding assets. During the Australasian session the Australian Dollar rallied in response to a weaker US currency. The Australian Dollar continues to strengthen versus many of its peers on Thursday despite weak manufacturing data out of China. The advance can be attributed to positive domestic data which showed Australian Consumer Inflation Expectation increase.

New Zealand Dollar (NZD)
Similarly to its Oceanic counterpart, the New Zealand Dollar strengthened after dovish FOMC minutes initiated a US Dollar downtrend. Thursday has seen the ‘Kiwi’ (NZD) continue to edge higher after annual Credit Card Spending eclipsed expectations. Poor Chinese manufacturing data has slowed the ‘Kiwi’ uptrend, however.

Canadian Dollar (CAD)
Canadian economic data failed to meet with the market consensus on Wednesday which saw the ‘Loonie’ (CAD) edge lower versus many of its currency rivals. The depreciation gathered momentum after the US dollar softened. However, Thursday has seen the ‘Loonie’ pick up fractionally as oil prices climb steadily.
As of Thursday, 21st May 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.4098, GBP USD exchange rate was 1.566, GBP AUD exchange rate was 1.9833, GBP NZD exchange rate was 2.1309, GBP CAD exchange rate was 1.9109, and GBP CNY exchange rate was 9.7042.

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