Pound Strengthens Amid Risk Appetite

The pound gained ground against the other major currencies in early European trading on Wednesday, as risk sentiment improved on receding Brexit concerns and as Eurozone finance ministers approved in principle a reform package for Greece that will unblock new loans.

Worries about a likely rate hike by the Federal Reserve ebbed somewhat as robust U.S. housing data fueled speculation the world's largest economy can withstand higher interest rates.

Oil prices edged towards $50 a barrel, buoyed by gains in global equities and industry data showing a larger-than-expected drawdown in U.S. crude inventories last week.

The pound has been already underpinned by receding fears over a 'Brexit' in a referendum on the U.K.'s membership of the European Union in June.

The latest ORB Telegraph poll showed Tuesday that the supporters for remain camp surged to 55 percent, a 13-point lead over the 'Leave' campaign, whose campaigners stood just 42 percent.

In economic news, survey data from the Society of Motor Manufacturers and Traders showed that British car production rose strongly in April driven by a surge in export volumes and marked the ninth straight month of growth.

Car production grew 16.4 percent year-on-year to 149,334 units, the SMMT said. Export volumes surged 23.7 percent, offsetting a 7.8 percent slump in domestic demand.

The pound was modestly lower in Asian deals.

In European deals, the pound climbed to 6-day highs of 1.4663 versus the dollar and 161.36 versus the yen, off its early lows of 1.4601 and 160.44, respectively. On the upside, the pound is likely to find resistance around 1.48 against the greenback and 163.00 against the yen.

The pound strengthened to near 4-month highs of 0.7602 against the euro and 1.4544 against the franc, reversing from its previous lows of 0.7639 and 1.4477, respectively. If the pound rises further, it may find resistance around 1.48 against the franc and 0.75 against the euro.

Looking ahead, Swiss ZEW economic sentiment index for May is due to be released shortly.

At 6:30 am ET, European Central Bank board member Vitor Constancio is expected to speak at Session 2 "The International Monetary and Financial System - A European Perspective" at Joint Bank of England/FESSUD Workshop "Mapping the future of Finance" in London.

In the New York session, U.S. advance goods trade balance for April, Markit's flash services PMI for May, FHFA house price index for March and U.S. crude oil inventories data are slated for release.

At 9:00 am ET, Federal Reserve Bank of Philadelphia President Patrick Harker is expected to speak on the economic outlook before the Forum on America's Economy 2016 in Philadelphia.

The Bank of Canada's interest rate decision is due at 10:00 am ET. The economists expect the bank to hold rates at 0.5 percent.

At 2:00 pm ET, Federal Reserve Bank of Dallas President Robert Kaplan will participate in a moderated question-and-answer session before the Greater Houston Partnership Thought Leader Series.

Euro vs Sterling (FX:EURGBP)
Graphique Historique de la Devise
De Mar 2024 à Avr 2024