UK Data Dominates The Week

7 May, 2013

Graham Harborne

After last week’s major data releases from both Europe and the States this week sees the turn of UK data releases to be the main economic driver within the currency markets. Euro was the main loser last week with the ECB cutting their interest rates at the monthly meeting. Though this was not a huge surprise the fact that ECB president Draghi said there was room for further cuts if deemed necessary weighed heavily on the bloc currency. The data releases from the U.S (non-farm payroll and manufacturing input) were both positive and this had a mixed reaction with initial dollar strength followed by risk appetite returning to the markets which led to some dollar selling at the close of business. With yesterday being a bank holiday markets were closed in the UK but we seem to have started the short week at levels near the close of Friday. BoE meet on Thursday this week and though we do not expect to see any changes will the ECB cutting rates last week force the hand of their UK counterparties to act now ? The likelihood is no as we have had some positive data recently and if key manufacturing data also out this week is in line with expectations then we are unlikely to see any changes from the MPC in the near future. Keep in touch with your account manager here at Currency Index so you don’t miss out should there be any sudden changes.