Markets led by Current Sentiment
9 May, 2018
There was little to go on yesterday with a lack of key data releases, so markets were led by current sentiment, which lies with the US dollar.
As such, the pound made steady gains against the single currency Euro over the course of Tuesday, mainly due to the currency see-saw effect, where a strong dollar leads to a weaker euro (and vice versa). This was highlighted further by the fact EURUSD rates pushed lower still, breaking into the 1.18’s. This pair is some 5 percent lower than it was a few weeks ago, with analysts expectations pointing to even lower rates in the near term, but not surprising to UK traders who’ve seen an 8 cent gain by the dollar against sterling of late.
The dollar continued to gain against sterling in the morning although concerns over which way Trump would go with the Iran deal seemed to weigh on investors once the US markets opened, which saw the pound retake earlier losses. As it happened, once Trump announced the US withdrawal, it seemed markets needed further time to digest as there was little effect.
Today is a very quiet day for data with little of note all day until a speech by Fed member Bostic this evening and the RBNZ interest rate meeting, policy statement and press conference from 10 pm. Needless to say, anyone with a Kiwi Dollar requirement should speak to one of the CI team beforehand to mitigate potential risk.
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