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GBP continued to eke out gains against its main trading partners yesterday on a day of thin data and anorexic interest.

While we are obviously happy to see sterling move higher and retrace closer to PPP the momentum has slowed somewhat over the past 2 trading sessions. We would not be surprised if we saw a relief rally lower in the coming days with a possible push into the 1.10s for GBP/EUR and down to 1.45s for GBP/USD.

Data yesterday was a warning to those of us who thought the dog days were over as US retail sales plummeted by 1.1% in the month of March. The consensus view was for a 0.3% increase. The level of price discounting in the US auto sector won’t have helped although ex autos the figure was still 0.9% lower.

As we said yesterday the main data focus this week will be from the US. PPI was sharply lower yesterday and today’s CPI could follow a similar course while the ‘Beige Book’ will surely hint at bearish conditions around the US.

Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our: Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080. Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.

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