Sterling Strongest Quarterly Gains in almost 3 Three Years

GBP: Sterling leads the way

Sterling finished last week on a high - up against nearly all the majors. It ended at 10-week highs against the Dollar and 11-month highs against the Euro.

It was the move against the Euro that really stood out as GBP finally broke out of the range it’s been stuck in since last May; having failed to break above 1.15 on three previous occasions.

However, as we pointed out last week the timing is strange as the UK economy has hit a little bit of a soft patch. Could it be that Sterling’s rally is due to the repatriation of investor dividends – a longstanding seasonal pattern that happens every April – rather than a fundamental shift?

EUR: Out of step, out of puff

As we have noted above, the Euro finally lost the tug-o-war with Sterling which has been going on for months (felt like years).

It hasn’t come as a complete surprise as the Euro has struggled to maintain last year’s upward momentum.

The minutes from the European Central Bank (ECB) showed that EU policymakers are still a long way off considering the possibility of raising interest rates. With other central banks beginning to tighten, the Euro looks out of step.

Strong economic data will only boost the Euro if investors believe it can change the stance of the ECB.

Not a lot scheduled for today but German and Eurozone ZEW Surveys (measures economic sentiment) are both due out tomorrow.

USD: Dollar steadies after Syria strikes

The dollar firmed up this morning following the military strikes on Syria over the weekend.

President Trump posted “Mission Accomplished” on Twitter which indicated that the conflict may be over (for now).

Friday’s University of Michigan sentiment index was lower than forecast, but investors still believe the Fed will not waiver and continue to increase US interest rates – unless of course there is an outbreak of military or trade warfare.

Thanks For Reading, What Next?

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Geoff Lambourne - Direct Dial me on 0044 (0)1872 487 470.

Current rates:

Tuesday 17th April 2018 at 11:00

£1.00 GBP = 1.1575 EURO

£1.00 GBP = 1.4320 USD

£1.00 GBP = 1.8415 AUD

£1.00 GBP = 1.9502 NZD

£1.00 GBP = 1.8004 CAD

£1.00 GBP = 17.2418 ZAR

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