Daily Market Report – 19/06/2014

Important Notice:
The Pound has hit its highest level against the US dollar since August 2009. If you would like to get a live quote please call the dealing desk.

Sterling gained some strength yesterday as Senior Bank of England officials lined up to suggest that the interest rate hike is going to come sooner than expected. This is attributed to the fast economic growth and sharp drops in the unemployment rate for the UK, despite the low inflation that we are experiencing.  

Traders will be trading the fundamentals in such an uncertain international market, so expect flow into GBP and to see a slight strengthening in the currency. Currently we are trading at levels not seen since April 2009.

The strong pound should also keep inflation lower as imports will be relatively cheaper. 
The USD slid to its weakest this month against all major peers as the Fed signalled that they are ready to keep interest rate near Zero as the Central bank ends its bond purchases, this has seen a dampening demand for the US currency. The decision to seize interest rates near zero, was made due to the fact the US economy remains relatively weak.
With Euro-zone construction output beating forecast, hitting 8%, a whole 3% improvement on last year’s figures we saw the Euro gain throughout trading. Despite the good news from the euro-zone it was only able to claw back a minor amount of the ground lost. The outlook for the Euro remains weak given record low interest rates and low inflation.
Overnight there was strong GDP growth  in New Zealand with he economy growing 3.8% in the first quarter of 2014. This was largely due to strong construction figures for the  rebuild in Christchurch after the 2011 earthquake.

We have UK retail sales released at 09.30 expected  to come in slightly lower than last month. Later in the afternoon we have Jobless claims in the US expected to show some improvement from last month.

Key Announcements:
09.30 – Retail Sales Figures  for may expected to contract to -.5%
13.30 – USD Continuing jobless claims expected to fall 14,000 
13.30 – USD Initial jobless claims expected to fall to 314,000

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