The Pound made gains against the Euro and the Dollar after a pledge from European officials that debt aid for Greece will be immanent suppressed worries about euro zone credit risk. Data showing rising UK house prices also helped to support the Pound. UK house prices rose 1 percent in April, increasing for the second straight month and suggesting the housing market is improving after weakness in the sector in 2008 drove the broader economy into recession. Gains in the pound were capped, however, and the UK currency hovered near a four-week low versus the greenback as signs a UK general election may result in a hung parliament heightened uncertainty about the next government.
The Dollar declined against the Euro and the Pound as yesterday’s statement from the US Federal Reserve offered a more upbeat view of the US economy, helping boost risk sentiment yet weighing on the safe-haven greenback. The Fed maintained its pledge to keep interest rates low for an extended period and slightly upgraded some of its economic forecasts. In other news, a government report showed the number of US workers filing new applications for unemployment insurance fell slightly less than expected last week. The improvement in the labour market remains slow but claims data should have little effect on a market where all the focus is still on the euro periphery.
The Euro declined against the Pound while making gains against the Dollar rebounding from a one-year low the previous day on hopes a bail-out plan for debt-stricken Greece would be finalized soon. Gains for the single currency were capped however, as details of the Greece package were limited, leaving uncertainties about the timing and implementation of any deal. Nonetheless, the market is seeing a bigger package for Greece, covering three years, as a bigger backstop and that is helping to tame some investor fears. The euro was also supported by euro zone economic sentiment jumping much more than expected in April, pointing to strengthening economic activity.
Data released 30th April 2010
EU 10.00 Flash HICP (April)
EU 10.00 Unemployment (March)
US 13.30 Advance GDP (Q1)
Deflator
US 14.45 Chicago PMI (April)
US 14.55 Michigan Sentiment (April Final)