By Simon Eastman
Yesterday was a flat day on the markets with little movement to trade off.
We had no data for the UK or Europe to go on in the morning, which saw exchange rates trade in a small range on GBP/EUR with around half a cent range over the course of the morning ahead. The government announced some help for UK homes to combat the rise in the cost of living, with a windfall tax on energy companies of 25 percent. This will be used to fund every UK household a £400 discount on their energy bills, with further help for the elderly and those on benefits, with some 8 million households collecting a further £650. Unlike previous help, which needed to be repaid, these grants do not.
The news did little to affect markets with rates unchanged across the board ahead of the US market open at lunchtime. The markets digested US GDP figures which came in lower than had forecast, showing a contraction in growth of 1.5 percent compared to eh expected 1.3 percent. This saw the dollar make gains across the board, helped by better employment data showing less people than expected were looking for work. New home sales also increased more than forecast to help see the dollar as the main beneficiary over the afternoons trade, gaining back the half cent taken in the morning against sterling. In Canada, retail sales caused the Loonie some problems, as we saw flat growth in that sector, whereas they were expecting a 1.4 percent growth.
This morning we have already seen Australian retail sales come out as expected, giving little movement against the Aussie dollar. We see no more key data releases this morning, with markets awaiting the US open with a raft of data including personal consumption figures, trade balance, personal income and spending, wholesale spending and the Michigan consumer sentiment index at 2pm to round off the week.
The pound has been flat over Asian trading so far today, so we await this afternoons figures for any guidance. If you have a transfer to make, bear in mind Memorial Day affecting value dates on Monday and the extra bank holidays in the UK from Thursday. Delivery dates will be hampered so if you have a completion coming up for month end or early June, speak to one of the team today to make sure you don’t get caught out.