Data quiet in finely balanced markets

11 March, 2014

Matthew Boyle

Following last week’s speech by ECB president Mario Draghi we saw the Euro claw back much of the ground lost this year, particularly against the pound. However since last week’s speech we have slowly started to see rates slipping back against the single currency, with not just the pound and a large range of non-majors but also the struggling USD regaining ground. Any early report showing Sentix Investor Confidence slightly down on expectation was enough early in the day to shift the balance slightly in Sterling’s favour. This shift could not be reversed in the afternoon despite some better than expected CPI data from Greece – one of the EU countries that has struggled more- and the pound stole a almost half a cent against the single currency on the previous day’s trading.

Today we see data of note from Japan as the BOJ announce their Interest rate and Monetary policy decision, however eyes will be more largely focussed upon the GBP>EUR cross as already this morning we have seen trade data (Jan) from Germany down to 17.2 bill from an expected 17.7 . This however was almost instantly balanced with their Exports and Imports balances for Jan which both came in above expectation – 2.2% up from 1.4% and 4.1% from 1.3% respectively. Albeit these releases are not of major note we may see a slowing down of the pounds gains against the Euro and perhaps more of a flat line, certainly until we move on to the only other major release of note today with UK inflation report hearings mid-morning.

Certainly the balance between GBP and EUR at present is a finely balanced one, particularly when the USD is thrown into the mix. Albeit in the last few weeks the pound has stayed fairly range bound, particularly against the single currency we have tested the range in past weeks. No doubt with the US debt crisis a seemingly sleeping giant at present, Draghi and the ECB ever talking up Euro recovery, it is still unknown as to which way the pound may go particularly given some of the shock results recently.

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