Sterling was last week’s top performer
Sterling was last week’s top performer.
It came on the back of better than expected data combined with continued optimism about an election win for Theresa May. Expectation is high that there will be a Conservative victory in the General Election on 8th June which has given a boost to Sterling. While investors had been pessimistic about the purchasing managers’ index (PMI) they were pleasantly surprised as the April figure came in above forecast last week.
Meanwhile in the Eurozone the ECB president Mario Draghi faced the Dutch MP’s who were uncomfortable with the European Central Bank’s expansive monetary policy and its monthly purchase of €60bn in bonds. It was a less comfortable time for the euro after Mario Draghi was not forthcoming in how he saw policy moving in the future and showed no intention of winding down the quantitative easing scheme, noting it was too early to call it a success. However the euro stayed firm.
The only main change yesterday was the Kiwi, despite the Reserve Bank of New Zealand keeping its Official Cash Rate benchmark unchanged at 1.75%, the move came from the omission of a suggested need for a rate hike in the future on the back of inflation.
All eyes are on The Bank of England at midday as it announces its interest rate decision, the quarterly inflation report and the release of the minutes of the Monetary Policy Committee. No rate hike has been priced in however investors will be eager to view the minutes to see the member split for a higher rate hike in the future. All eyes on Sterling.
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