Data released this morning have confirmed that UK grew 0.3% in the first quarter beating the expectations of 0.1% growth – thus the UK avoided a triple dip recession. As a result sterling has made strong gains across the board.

The pound remained was well supported yesterday also as BBA mortgage approvals increased in March to 31,200 and the Bank of England announced that it is extending its Fund for Lending scheme to January 2015.

Data released this morning have confirmed that UK grew 0.3% in the first quarter beating the expectations of 0.1% growth – thus the UK avoided a triple dip recession. As a result sterling has made strong gains across the board.

The pound remained was well supported yesterday also as BBA mortgage approvals increased in March to 31,200 and the Bank of England announced that it is extending its Fund for Lending scheme to January 2015.

The euro suffered a further setback yesterday morning as IFO business confidence figures fell below expectations, adding to speculation that the European Central Bank will cut interest rates in order to stimulate growth – according to some analysts this may come as early as next week. The euro one did however receive some positive news as Enrico Letta was appointed as Italy’s next prime minister.

The US dollar weakened against most major currencies yesterday as durable goods orders fell well below an expected -2.8%  coming in at -5.7% ages. The data adds to the recent sentiment amongst investors that the US Federal Reserve will not be in any rush to scale in the current monetary stimulus program.

The US dollar continued to weaken in overnight trade as well amid speculation that the Bank of Japan may look to expand their monetary policy program further causing investors to seek out higher yielding currencies – the New Zealand dollar continued to strengthen following on from the hawkish comments from Reserve Bank of New Zealand Governor Graeme Wheeler on Tuesday night.

Data from Spain this morning showed that the unemployment rate rose to 27.16% in the first quarter from the previous quarterly figure of 26.02% – the poor data will add to the continuing sentiment of an impending rate cut by the ECB.

The rest of the day is void of any further economic data, but Japan will come under focus overnight. Inflation figures are set to be released as is the Bank of Japan’s interest rate decision but the main focus will be on the BoJ’s monetary policy statement, where investors will be looking for indications of further expansion.

Key Announcements:

13.30pm – USD – Initial Jobless Claims (Apr 19): Expected to fall to 351,000.

23.45pm – NZD – Trade Balance (Mar): The trade surplus is expected to fall to NZ$373mln.

00.30am – JPY – National Consumer Price Index (Mar): Previous figures were -0.7%.

03.00am – JPY – BoJ Interest Rate Decision: Expected to remain at 0.1%.

03.00am – JPY – BoJ Monetary Policy Statement and Press Conference.