Daily Insight

Sterling has enjoyed a mini-rally in the past 24hrs as the Bank of England's Monetary Policy Committee released the minutes of its last meeting, again showing a spilt of 8-1 in favour of keeping interest rates at 4.50% in April as Stephen Nickell voted for a quarter-point cut for the fifth month running. We briefly traded up through 1.4500 against the Euro and although we closed just below this level, there is some significant data released in the UK this morning with the Consumer Price Index expected to show a mild improvement in the month of March. In the Euro-zone, following Romanov Prodi's narrow election win, Italian Consumer Confidence is forecasted to show a drop in April as the closest Italian national election in history prompted concerns that the government will be incapable of expanding economic growth in Europe's fourth largest economy.

With regards the Dollar, U.S Consumer Prices rose by 0.4% in March, which was largely in line with expectations but Core Prices rose by the most since March 2005, jumping 0.3% last month. However, the Dollar continues to struggle against the majors after dropping to a seven month low against the Euro and we briefly traded upto 1.7900 against Sterling yesterday afternoon before closing just under this level.

There is some significant data released in the States this afternoon with U.S. Leading Indicators expected to be unchanged in March following a 0.2% decline in February, supporting suggestions that economic growth will slow into the second quarter. In addition, the Philly Fed Index, which examines manufacturing in the Philadelphia region, is predicted to support the view that the Federal Reserve can keep lifting interest rates and may give the dollar a much needed boost after dropping 4% against the Euro in the first fourth months of the year.

Data Released 20th April

EU 09:30 Harmonised CPI (Mar)

UK 09:30 Consumer Price Index (Mar)

U.S 13:30 Initial Jobless Claims (w/e 15th April)

U.S 15:00 Leading Indicators (Mar)

U.S 17:00 Philly Fed Index (April)

written by Adam Solomon