The Sterling ended the previous week with losses against most major peers, although some gains were registered against most commodity currencies and the Buck. The Pound added 0.27% versus the Aussie, while remaining almost completely unchanged against the Loonie and the US Dollar, up by 0.01% and 0.02%, respectively. At the same time, the GBP/NZD pair sustained a 0.21% decline, while slumping 0.68% against the Swiss Franc and 0.84% against the Euro. At the same time, the Japanese Yen managed to add 1.48% against the British currency, having retained its post-BoJ meeting strength.
The Fed's favourite inflation barometer slowed in March, falling from one-and-a-half-year peak, while consumer spending ebbed. The price index for personal consumption expenditures excluding food and energy ticked up 0.1% in March, following a revised 0.2% gain. The rate of inflation over the past 12 months slid to 1.6%. In the previous two months, the core deflator was growing 1.7% year-on-year, the quickest pace since mid-2014. Inflation is being restrained by a strong Dollar and cheaper energy. A tightening labour market also failed to generate strong wage gains, contributing to moderate consumption growth. In March, consumer spending, which accounts for more than two-thirds of US economic activity, ticked up 0.1% after an upwardly revised 0.2% gain in February. Consumer spending is expected to pick up momentum as wages steadily rise. Personal income increased 0.4% in March after nudging up 0.1% in February.
Meanwhile, confidence among America's shoppers worsened for the fourth consecutive month in April. The Thomson Reuters/University of Michigan preliminary consumer confidence index decreased to 89.0 points in April, down from the final 91.0 reported in March, when it had dropped to a fresh five-month low. The current economic conditions sub-index improved to 106.7, while the indicator tracking future expectations declined 4.8 points to 77.6 during the reported month.
US Manufacturing PMI and US Construction Spending
GBP/USD attempts to climb over 1.46
The GBP/USD currency pair remained relatively unchanged on Friday, with the pair edging only 5 pips higher over that day. The Cable is expected to continue climbing higher today, with the nearest resistance located only around 1.4710. However, there is insufficient impetus for a rally that high today, with price likely to close near the 1.4650 mark. Technical indicators are giving bullish signals, bolstering the possibility of the positive outcome. On the other hand, the Sterling also risks remaining below the 1.46 major level, with the closest area to limit the losses being the weekly PP at 1.4563.
Daily chart
Hourly chart
Sentiment at perfect equilibrium
Today 52% of all open positions are short, compared to 54% on Friday. Meanwhile, the portion of orders to sell the Pound edged lower, namely from 65 to 56%.
At OANDA market sentiment reached a perfect equilibrium today, with only 50% of their open positions being long, compared to bulls outnumbering the bears by only one percentage point on Friday. Meanwhile, the sentiment at SAXO Bank remains bearish, with 55% of their traders holding short positions (previously 63%).
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD above 1.44 in three months