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The pound has strengthened against the euro and the dollar this morning, building on gains made yesterday following high inflation figures.
The main focus for the markets today will be the European Central Bank’s interest rate decision. Although the interest rate is expected to be kept the same, the message delivered from officials surrounding monetary policy and interest rates for the rest of the year will be listened to closely.
The euro has strengthened against the dollar in anticipation of a more ‘hawkish’ message from officials and could be impacted by news from the meeting, which is due to take place around lunchtime.
Please note, we will be closed on Friday 15th and Monday 18th of April for the Easter Bank Holiday. We are open as usual from Tuesday 19th April.
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GBP: Pound stronger following high inflation
The pound has strengthened against the euro and the dollar this morning, building on gains made yesterday following high inflation figures.
Inflation in March surged to its highest annual rate in 30 years, reaching 7%. This has boosted expectations that the Bank of England will hike the interest rate again at its next meeting and possibly subsequent meetings throughout the year.
The data calendar is empty today ahead of the Easter bank holiday. However, next week PMI and consumer confidence figures will be released.
GBP/USD chart over past year
EUR: ECB meeting this morning
The euro has strengthened against the dollar this morning ahead of the European Central Bank’s interest rate decision today.
Although ECB officials are expected to keep the interest rate the same, it is expected that they will deliver a more hawkish message due to record high inflation. This could include ending its bond buying programme earlier than planned and perhaps indicating that an interest rate hike will occur this year.
The markets will be listening to any comments from policymakers, including European Central Bank President Christine Lagarde.
USD: Retail sales data due today
The dollar is slightly weaker against a basket of currencies this morning ahead of a series of economic data releases today.
Retail sales figures will be released for the US, expected to have risen month-on-month in March. In February, retail sales were pushed up by a jump in the sale of gasoline.
The consumer sentiment figure will also be released; however, this is expected to show a slight decrease in April.
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