The Dollar has pushed lower over the last four trading sessions amid speculation that the market’s initial forecast for a June rate hike will now be later in the year. The sentiment really changed over the Easter weekend when the unemployment data from the US disappointed. Yesterday’s data only compounded this negative sentiment as the Conference Board consumer survey painted a weaker picture with the overall confidence index declining 6.2pts to 95.2 – the lowest reading since December last year.
Meanwhile the UK’s economic picture became more cloudy as the first reading of the UK’s GDP was released. The figure showed that growth slowed on a quarterly basis by the most in two years and missed forecast. This only adds to the question marks surrounding the economy as the most unpredictable election is fast approaching. Sterling remains fairly steady right now but could face a period of volatility in the near future.
The Euro made gains across the board as newswires surrounding Greece were more positive. An EU official is reported to state that Greece talks have intensified and that talks have been more productive and efficient. This increase hope that an agreement will be made to help the ailing nation and a breakup looks more avoidable.
The focus today is firmly on the US as the first release of their Q1 GDP is due and expected to make a sharp decline to 1% from 2.2%. Later in the evening the two day FOMC meeting is due to conclude. The press conference, rhetoric and tone will be keenly watched from clues on whether June is still a realistic date for the “lift off” in rates. If FOMC hint that June is still on the cards despite the soft data then the greenback could regain some of its losses. Likewise a dovish tone on June could extend the Dollar’s losses.
Keep up to date with our 'Election watch' in the countdown to the UK General Election.