Hope on the horizon for Sterling
Daily Currency UpdateThere was nothing from the UK data or coronavirus wise that can be pointed to in order to explain the moves. These moves on GBPEUR and GBPUSD were more euro and dollar led. Looking forward though there are glimmers of hope on the horizon from the UK.
Of note this morning we have had the latest UK retail sales figures and whilst not as hard hitting as it is in America, this morning's release was a big beat, coming in at 5.4% against an expected 1.5%. It would appear all of that 'pent up demand' that Chief Economist of the Bank of England Andy Haldane has mentioned would appear an accurate description.
Key MoversYesterday's meeting at the ECB was very much a non event with no interest rate changes and no change to the asset purchase programme that the central bank has in place.
The next meeting in June could be more significant. For EURUSD there was a small break above 1.2050 which didn't last before the currency pair retraced back down.
Over in the US the big announcement came from President Biden as he laid out plans to double capital gains tax to 39.6% for anyone owning over $1m. This is all part of Biden's project to reform the welfare system in the US. As a result of the announcement the S&P 500 and Dow Jones both fell, with the former dropping the most in a month. If Biden gets the whole of his plan through then we could see a rotation out of equities come 2022 into other assets.
- GBP/USD: 1.3820 - 1.3940 ▼
- GBP/EUR: 1.1500 - 1.1620 ▼
- GBP/AUD: 1.7915 - 1.8070 ▼
- EUR/USD: 1.1945 - 1.2080 ▲