Dollar strength continues

Yesterday’s markets

10th April 2015

  • GBP Bank rate 0.50%
  • CAD Building permits -0.9%
  • USD Unemployment claims 281k

 

The Greenback strengthened against the Pound and Euro yesterday as external factors such as UK politics and the Greek exit dominated price action and drove the two currencies lower. This combined with hawkish comments from two Fed members sent the Dollar surging against its major counter-parties.

Firstly, in the knowledge of the poor non-farm pay rolls report, Fed members Bill Dudley and Jerome Powell both discussed scenarios in which the central bank could make an initial move earlier than expected, proceeding in a gradual manner to slowly raise rates. Market expectations are still for a rate hike in the latter half of the year and both members said that they can still imagine circumstances where this could happen. This information coupled with the Fed minutes on Wednesday has seen the Dollar continue to strengthen.

In Europe, Greek Finance Minister Yanis Varoufakis said his country isn't looking outside Europe to resolve its financial crisis, adding that he’s confident of reaching an agreement with European partners this month. The ECB have recently approved a €1.2Bn Euro increase in the emergency funds available to Greek lenders yesterday. A deal is forecast to be struck by the 24th of April.

Today’s markets

9th April 2015

  • GBP Manufacturing production
  • FOMC Member Lacker speaks
  • GBP NIESR Estimates

Today’s docket is relatively light, this morning we have UK manufacturing production forecast to increase to 0.4% followed by FOMC member Lacker speaking in the afternoon. At 3pm UK time the NIESR (National Institute of Economic and Social Research) GDP estimate is due for release.