The pound has remained stagnant following the Easter break with markets waiting for any political headlines out of the UK. Reports suggest that Theresa May is under increased pressure to step down as Prime Minister and there is even talk that the 1922 Committee are so disheartened by May’s rule that they are going to vote on whether to bring forward the date on which a challenge to May’s leadership can be mounted. The home currency doesn’t look like moving until there is some concrete evidence to back up these rumours but if this does come to fruition then expect Sterling volatility.
The U.S. Dollar has become a driving force on the currency markets this week as better than expected earnings data and good new home sales numbers paved the way for a potentially strong GDP reading this Friday. The greenback has strengthened against a basket of currencies, including a near 1% gain versus the pound and a 0.75% swing against the Euro.
The Australian Dollar has been the big mover this morning, falling 1% against its peers. This was due to weaker than expected inflation numbers out of Oz, which has in turn increased the chances of an interest rate cut. Inflation in Australia is at its lowest since early 2016.