FX traders are waiting for next week's policy meeting of the Bank of England before making any major bets on Sterling. In London trade today, the Pound had lost ground against the US Dollar after striking a 9-day peak yesterday, but was holding its own against the Euro. Analysts say that the greenback lost favor after the US central bank dismissed any consideration for a monetary policy shift from the current ultra dovish stance. Like the Fed, the BoE is not expected to make any major shift in policy, at least not in the short term, but market players will wait the follow-up press conference which could give clues as to timing on a move toward a more hawkish perspective.
In London trading as of 11:06 am, the EUR/GBP was trading at 0.8694 Pence, a gain of 0.0403%; the pair has ranged in this trading day from a trough of 0.86825 Pence to a high of 0.87045 Pence. The GBP/USD was down at $1.3905, a loss of 0.2508%, off the session peak of $1.39591 while the low was posted at $1.39004. The GBP/JPY was trading at 151.343 Yen, down 0.3043%, with the high at 152.132 Yen in today's session.
EU Data Largely Disappoints
A slew of data was released earlier today from the Eurozone, including preliminary first quarter GDP figures for Germany, France, Italy and Spain. On a quarter-over-quarter basis, Germany failed to meet analysts' predictions, while France and Italy were better than expected, and Spain's data was spot on with forecasts. The EU area's first quarter GDP came in at -0.6%, slightly better than the -0.8% that had been predicted. Seasonally adjusted GDP for the same period was also better at -1.8% against a forecast of -2%. The preliminary CPI reading for April on an annualized basis was as expected at 1.6%; core CPI, which strips out volatile components, failed to meet forecasts at 0.8%. The EUR/USD was trading at $1.2095, down 0.1997%, off the session trough of $1.20900.