Daily Market Report 10/04/2014

USD

So
the main focus yesterday was on the Fed Minutes released at 7pm yesterday. We
saw the US dollar weaken further as the Federal Reserve played down previous
forecasts by some of the policy makers that interest rates might rise faster
than previously predicted. They were worried that traders might over react to
forecasts that suggested interest rates could be 2.25% by the end of 2016.

GBP

USD

So
the main focus yesterday was on the Fed Minutes released at 7pm yesterday. We
saw the US dollar weaken further as the Federal Reserve played down previous
forecasts by some of the policy makers that interest rates might rise faster
than previously predicted. They were worried that traders might over react to
forecasts that suggested interest rates could be 2.25% by the end of 2016.

GBP

Yesterday the UK’s overall trade balance and
goods trade balance (the difference between exports and imports) both reduced,
which is typically seen as good news. However, on a closer look at the data it
is not so positive. Exports are down to their lowest level since November 2010.
Imports have also declined which underlines the IMF’s warnings yesterday that the UK is at risk of an
unbalanced recovery which is just built on domestic demand and not
international trade.

EUR

German
trade balance, data was not so good yesterday. Their traditional trade surplus
has decreased from €17.3bn to €15.7bn, indicating that their export volume is
shrinking.

Today

Data is quite limited today.
The main focus is on the US where both initial jobless claims and continuing
jobless claims which is meant to be mixed.

The UKs interest rate decision
is also out today, which is indicated to remain unchanged at 0.5% and QE
expected to remain the same.

In the absence of any major
news, selling pressure on the US dollar may well remain and thus we could see additional
GBPUSD upside. GBPEUR still remains relatively flat, with any moves more than
likely to be dictated by events and data in the Eurozone seeing as the majority
of the optimism surrounding the UK is priced in to the pound.

Key Announcements:

13.30pm – USD – Initial Jobless
Claims: Expected to fall to 320,000.