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Pound rises versus US dollar after China files WTO complaint

currency-newsPound rises versus US dollar after China files WTO complaint
Positive comments from Bank of England (BoE) policymakers failed to boost the pound yesterday.

The pound is on strong form this morning. The GBP/EUR exchange rate is up 0.1% to €1.1481, while the GBP/USD exchange rate has risen 0.2% to US$1.4206. The GBP/AUD exchange rate has risen 0.4% to AU$1.8346, the GBP/NZD exchange rate is also up 0.4% to NZ$1.9313, while the GBP/CAD exchange rate has risen 0.3% to see $1.7919.

Read on to see what the packed global data calendar holds for today…

What’s been happening?

Despite confident comments from a Bank of England (BoE) policymaker yesterday, pound Sterling was mostly on poor form, only able to record gains against the US dollar.

Monetary Policy Committee (MPC) member Ian McCafferty said yesterday that policymakers should not ‘dally’ when it came to tightening monetary policy, citing amongst other things the fact that there was little slack left in the UK labour market.

Meanwhile, BoE Chief Economist Andy Haldane defended the bank’s history of loose monetary policy and made no reference to the outlook going forward.

Traditionally one of the more cautious members of the MPC, the fact that Haldane didn’t warn against tightening monetary policy is a positive sign as far as markets are concerned.

However, the GBP/EUR exchange rate slipped below opening levels towards the end of the session, despite a lack of Eurozone data.

The pairing had hit a 14-month high, which prompted many traders to sell the pound in order to take profit.
Meanwhile, GBP/USD was able to record strong gains after it emerged that China had filed an official complaint with the World Trade Organisation (WTO) to dispute the validity of the steel and aluminium tariffs recently levied by the US.

What’s coming up?

Today’s economic data calendar promises plenty of volatility for the pound, euro, and US dollar.

Kicking off a busy day will be a slew of UK ecostats, including the trade balance, industrial and manufacturing production, construction output and, finally, the National Institute for Economic and Social Research (NIESR) GDP estimate for March.

ECB President Mario Draghi is due to give a speech today; combined with the highly-significant US releases scheduled for this afternoon this suggests that the euro is not going to be on good form today.

The releases in question are the US consumer price index figures for March and, after the European session is closed, the Federal Open Market Committee (FOMC) minutes from 21st March policy meeting.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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