Daily Insight

The Dollar has been suffering in the past week amid suggestions that economic growth will slow into the second quarter and yesterday we witnessed further evidence of a cooling housing market in the States as builders started work on the smallest number of new houses in a year last month, falling 7.8% to an annual rate of 1.96 million. However, U.S. Producer Prices came out in line with expectations, showing growth of 0.5% in March as costs of crude oil and petrol prices soared to record highs.

In addition, the minutes of the Federal Reserve's last policy meeting was released last night and the Fed chairman, Ben Bernanke, has indicated that they are nearing the end of their current rate cycle following 15-rate increases in 21 months. Without stipulating when a tightening of monetary policy will take place, many analysts are speculating that the Fed will lift interest rates in May and then pause at 5%. In the aftermath of the announcement, the Dollar weakened against Sterling to trade just above 1.7800 and dropped to a seven month low against the Euro. There is also some significant data released in the States this afternoon with the Consumer Price Index set to show an increase of 0.4% in March and Core Prices are expected to rise 0.2% from February.

In the UK today, the minutes of the MPC's last policy meeting are released this morning after the Bank of England elected to keep interest rates at 4.50% on April 5th. We have already seen some data released this morning in the Euro-zone with German Producer Price Inflation maintaining a 24-year high last month, due primarily to higher energy costs as the price of oil has averaged $60 a barrel since the middle of last year. Oil prices climbed to a record high yesterday of $71.60 a barrel as concerns over the situation in Iran intensified.

Data Released 19th April

UK 09:30 Minutes 5/6 April MPC Meeting

EU 10:00 Industrial Production (Feb)

U.S 13:30 CPI - EX Food & Energy (Mar)

U.S 13:30 Real Earnings (Mar)

written by Adam Solomon