Sterling has continued its downward drift on the back of weak UK Retail Sales data, coming in at -1.2 against -0.5% forecast. Although expected following the ‘Beast from the East’, a continued trend of disappointing UK economic data prompted the Bank of England governor Mark Carney to state that an interest rate hike in May is not a foregone conclusion. Bets sank to 40% following Carney’s comments. Market reaction has seen a selloff in sterling with GBPEUR lows at 1.1372 -0.28% and GBPUSD lows at 1.4037 -0.32%. The latest Brexit negotiations could cause further downside on sterling with reports of EU officials being set to reject the U.K.’s ‘solution’ to the increasingly crucial issue of what is going to happen with Irish border after Brexit causing further issues in what could see a stale negotiation period bringing a holt to the progress we’ve seen throughout 2018. There’s no major data releases for the UK today, however investors will keep a keen eye on MPC Member Michael Saunders’ speech for some further indication on interest rate hikes for the foreseeable future.
EURUSD has found support on its weekly low of 1.23, staying within its weekly trading range of 1.23-1.24. Today hosts the OPEC-JMMC Meetings to establish oil production from all members, and although not a huge market mover, with Oil prices hitting a three-year high at $74 a barrel there will be growing inflation fears for investors. The increased price is also taking its toll on sovereign bonds. The only major data releases for today impact CAD with CPI and Core Retail Sales. With GBP under pressure, next week’s key release is Friday April 27th quarterly Preliminary GDP release.