Daily Analysis: US Data Driving Volatility

Our daily analysis of EUR, GBP and USD.

USD

• GDP data released yesterday produced a disappointing reading but failed to impact the greenback in any meaningful way.
  • Q1 performance dipped to 1.6% falling short of the 2.5% forecast and posting a significant decline from 3.4% recorded in Q4.
• Attention turns to Core Personal Consumption Expenditures for March released at 13:30pm.
  • MoM suggest figures expected to remain at 0.3%.
• GBP/USD remains above 1.2500 despite an initial bounce following GDP yesterday as markets ponder the effect the data release will have on the Fed’s timing on interest rate hikes.

EUR

• Fabio Panetta, head of Italy’s central bank, has warned the ECB will need to implement further rate cuts if the Federal Reserve opts to keep rates higher than initially anticipated. Panetta’s comments are in contrast to other ECB rate setters who are against too much divergence from the Fed’s monetary policy path.
• ECB vice president Luis de Guindos speaks this morning.
• EUR/USD trades above 1.07 in the morning trading session.

GBP

• Sterling very much taking back seat in the latter part of the week with minimal data releases out of the UK.
• GfK Consumer Confidence released earlier improved marginally to -19 versus -21 previous.
• GBP/EUR remains trading in a tight range between 1.1640-1.1675.

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