The US dollar came under selling pressure on Friday as data revealed that the economy only grew by 2.5% instead of 3% in the first quarter.

The disappointing data from the USA will once again add to expectations that the Federal Reserve will look to continue its US$85bn monthly bond buying program without scope for a reduction in the near future. The Fed will by making its monetary policy statement this Wednesday.

The US dollar came under selling pressure on Friday as data revealed that the economy only grew by 2.5% instead of 3% in the first quarter.

The disappointing data from the USA will once again add to expectations that the Federal Reserve will look to continue its US$85bn monthly bond buying program without scope for a reduction in the near future. The Fed will by making its monetary policy statement this Wednesday.

The US dollar has started on the back foot this morning against most of its counterparts as data is forecasted to show that consumer spending stagnated in March and pending home sales fell in March to 6.1%.
The pound continued to be well supported on Friday following the better than expected growth figures last Thursday and data revealed by Hometrack Ltd this morning showed that house prices increased by 0.3% this month adding to the increased optimism for the currency.

Looking ahead, the euro zone is set to come under focus with market participants looking ahead to Thursday’s European Central Bank interest rate decision as well as Mario Draghi’s monetary policy press conference. Recent speculation has suggested that the ECB may reduce interest rates as early as this week given the recent run of poor economic data from the single-bloc.

Data to be released this morning is set to show consumer confidence in the euro zone increased slightly in April; limiting further losses in the euro this morning.

Key Announcements:

10.00am – EUR – Consumer Confidence (Apr): Expected to increase -22.3.

10.00am – EUR – Economic Sentiment Indicator (Apr): Expected to decrease to 89.3.

13.00pm – EUR – German Consumer Price Index (Apr): Expected to remain at 1.4%.

13.30pm – USD – Core Personal Consumption Expenditure (Mar): Expected to fall to 1.2%.

15.00pm – USD – Pending Home Sales (Mar): Expected to fall to 6.1%.

00.30am – JPY – Unemployment Rate (Mar): Expected to remain at 4.3%.

00.30am – JPY – Industrial Production (Mar): Expected to fall to-7.2%.