Daily Currency Report
Overview
The US trade deficit narrowed to $65.7bn, far better than economists had forecast. Nevertheless, the deficit is still the third widest on record and, as such, the US dollar was unable to hold on to the gains made immediately after the news broke.
GBP
Sterling rose to a one-week high against the US dollar and a two-week high against the euro, however it is likely to take its direction from the dollar's reaction to US trade data for February, and America's retail sales figures for March.
USD
The dollar rose modestly after the US trade deficit showed that gains were limited, however, by consensus the improvement could be temporary given the recent spike in oil prices.
EUR
German consumer price growth was rather muted with the annualised inflation rate dipping below two per cent last month. GDP growth rose steadily as household consumption picked up in the fourth quarter. Italian industrial production also rebounded nicely after the dip in January.
JPY
The Japanese yen was again sold-off against the other major currencies despite the fact that there were rumours that the Bank of Japan could end their zero interest rate policy as early as the third quarter. These rumours appear to be groundless as, after the recent monetary policy meeting, the Bank of Japan reiterated that there is no rush to bring rates above zero.