Sterling traded within a very tight range against Euro

With bank holidays in Portugal, Italy and ANZAC Day for our Antipodean friends in Australia and New Zealand yesterday and no data out elsewhere around the globe, it was a pretty quiet day in the currency markets.

Sterling traded within a very tight range against the single currency, moving within a 30 pip window over the day, while it lost further ground against the ever-strengthening greenback, which has gained over 3 percent over the last week or so. The dollar also continues to make gains against the euro as investor sentiment stays with the dollar ahead of the eagerly anticipated GDP readings for both the UK and US on Friday.

It’s a mixed preview of GDP as the wider forecast is for UK GDP to rise over the recent quarter and year, although not everyone agrees, with Barclays for one forecasting a drop. For the US GDP is expected to contract a fair amount from 2.9 percent to 2.3 percent for the year.

It’s a reading that can certainly move markets and being the final key release of the month and with differing expectations, it could be a volatile release, so those with transactions to make concerning sterling, euro and US dollar might be wise to lock in today ahead of the GDP release tomorrow.

Before that though we have some key EU releases in the shape of the German consumer confidence survey from the GfK ahead of the latest ECB policy meeting. What will Mario have to say on their current policy? Any further hints of curtailing their current policy indicating a more buoyant Eurozone economy will almost certainly pave the way for investors to buy up the euro and see the cost for those moving money into the EU increase. To avoid that risk, call one of the team at CI before the press conference at 1.30pm.