The Euro had a fairly difficult session on Wednesday after a speech from President of the European Central Bank Mario Draghi continued to suggest that an interest rate increase in the Eurozone remains some way off.
A slightly disappointing set of retail sales figures out of the US yesterday weighed on the greenback and reversed some of the Euro’s losses. Sales unexpectedly declined in February for the third straight month after investors had eyed a modest increase. The measure slipped 0.1% in February having declined every month since November, which suggests that overall activity in the US could be on course to slow down in the first quarter, which may be of some concern to investors. However, with risk aversion overshadowing all else, the Euro found any meaningful gains hard to come by.
This afternoon’s Philly Fed manufacturing survey could receive some attention, although the market will likely be focusing on Donald Trump who is expected to confirm Larry Kudlow as Gary Cohn’s replacement as economic advisor.
Sterling range bound amid lack of macroeconomic news
In another day void of any meaningful announcements out of the UK, the Pound spent much of the session fairly range bound against the US Dollar. Sterling has remained well supported just below the 1.40 mark against the greenback so far this week, with Chancellor Philip Hammond’s upgraded growth forecasts on Tuesday painting a slightly more upbeat picture for Britain’s economy this year. With no significant pieces of economic news until next Tuesday’s inflation release, we expect the Pound to remain mostly stuck in a range, barring any surprises from abroad.
Elsewhere, the Australian Dollar was one of the better performers among the major currencies yesterday. Strong data out of China, Australia’s largest source of export revenue, and some hawkish comments from a member of the Reserve Bank of Australia kept the currency well supported throughout the session.