GBP
Sterling opened at three year highs against USD and EUR yesterday, This a
result of continued growth from the UK economy and the increased likelihood of
Interest rates being increased. However, on Tuesday morning we had negative CPI
figures from the UK, posting 1.5% year on year growth, missing the forecast
1.7%.

This has been attributed to the supermarket price wars and a fall in the price
of airfares. We saw a slight weakening of the pound as a result, but we don’t

GBP
Sterling opened at three year highs against USD and EUR yesterday, This a
result of continued growth from the UK economy and the increased likelihood of
Interest rates being increased. However, on Tuesday morning we had negative CPI
figures from the UK, posting 1.5% year on year growth, missing the forecast
1.7%.

This has been attributed to the supermarket price wars and a fall in the price
of airfares. We saw a slight weakening of the pound as a result, but we don’t
anticipate this to be long term with the BOE minutes coming up this afternoon,
where for the first time we expect official votes for interest rate increases
to be posted.
 
EUR
We had ZEW Economic sentiment figures released from both the  wider
eurozone and Germany yesterday, both posting positive figures, which saw a bit
of a strengthening for the Euro.

Also attributed to the ground gained on its peer currencies on Tuesday was
traders moving into European Futures, we saw a heightened demand for the EUR
yesterday this is due to the weakening emerging markets and currencies.
 
USD
The USD gained throughout Tuesday due to positive CPI figures out from the US,
posting .4% growth when .2% growth was forecast.

The USD is also gaining strength and becoming more attractive due to it’s
safe-haven status, with escalating tensions in Iraq we could see more flows and
demand for the USD. One direct effect on the USD is the increasing Oil prices,
with oil prices jumping up 4% we expect to see an increased demand for the USD
as a direct result. The market is expecting a stronger USD in the short to
mid-term. 

Key Announcements:
09.30 – GBP Bank of England meeting minutes 
10.00 – Eurozone construction output 
19.00 – USD Interest rate decision expected to stay at 0.25%
19.00 – USD Fed Asset Purchases expected to be reduced by 10 billion
19.30 – USD Fed’s Yellen Holds Press conference after their meeting

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