Daily currency report

The dominant theme for this week's market news is interest rate decisions for both the ECB, widely expected to raise interest rates to four per cent, and the BoE, although on the latter there remain some lingering doubts upon the timing of the next interest rate move.

GBP
The sterling fell against both the euro and the dollar after reports signalled a cooling in the property market, casting some doubt over the timing of the next interest rate move, reminding policymakers that there may be no need to rush. In this week's Monetary Policy meeting questions are to be raised as to whether the next interest rate rise will be this month or delayed until July.

USD
The dollar rose to a seven-week high against the euro as US jobs and manufacturing data damped expectations of a Fed interest rate cut this year. Recent economic indicators have highlighted that growth in the Q2 may outpace the previous period and thus provide a resurgence in dollar fortunes.

EUR
The ECB is due to meet to discuss an increase of borrowing costs to four per cent, as is widely expected by the market. Additionally, the eurozone services PMI and the German Trade Balance out for release could further provide the catalyst for the euro's strength, although all market focus will be heavily reliant on the rate decision and subsequent comments.

JPY
The Japanese data needs to see some sustained good news in order for the yen to stage any type of meaningful rally. With interest rate movements dominating this week's market news, a further sell-off of the yen is likely. The BoJ Governor has claimed that rates rise are unlikely before August.