Yesterday a strong morning session was soon unwound with the release of solid US data and Theresa May’s manifesto.

Yesterday the sterling had surged almost one cent higher from the open as April retail sales numbers showed the quantity bought in the retail industry increased by 2.3 per cent compared with March and by 4.0 per cent compared with April 2016. This considerably outperformed market expectations of a 1.2 per cent increase, with the office for national statistics suggesting that good weather was a key factor in this, causing this upside surprise.

Robust unemployment claims and strong Philly fed manufacturing data took the legs out from under the Pound in early afternoon trading, well and truly putting a cap on this rally for now.

EUR

Minutes released on Thursday from the ECB April meeting showed that the ECB is eager to avoid the ‘taper tantrum’ experienced in 2013 when the Fed announced an unwinding of its stimulus which sent markets into a frenzy.

With political uncertainty appeasing and results in both France and Germany favouring pro-EU candidates, anticipation of the ECB tapering their monetary policy is increasing. They are obviously expecting this to have a significant impact on markets, as such expectations would be to see a strong euro in reaction to any announcements.

USD

The dollar index that tracks the US currency against six major currency peers fell from a 14-year peak as Trump faces the potential threat of impeachment.

News emerged this week that Trump had asked former FBI director James Comey to end his investigation into the ties between White House national security adviser Michael Flynn and Russia. Questions have been raised concerning Trump’s interference into the federal investigation, spurring speculations that he may have overstepped his bounds as President.

Markets have now shifted to a risk-off sentiment as investors shift to safe-haven assets as the Trump-Russia saga continues. The US dollar sank on the release of this news by 0.5 per cent against the Swiss franc, dropping the currency pairing to its lowest levels since November.

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