Pound Sterling Recovers on Hopes of Steel Crisis Resolution

Monday has seen the Pound continuing its recent recovery across the board. Investors have been encouraged by the possibility of Tata Steel’s UK assets seeing a relatively smooth transition to new ownership as the formal sales process begins in earnest. City investment firm Greybull Capital was revealed to have been in talks to purchase the Scunthorpe steel mill for some months, although the terms of the deal require compromise on staff pay and pension packets.

Euro Falters as Greece Meets with Creditors

Demand for the single currency has declined on the back of the latest Italian industrial production figures, which showed a sharp decrease in output. Although Greece is thought to be edging closer to a final signoff for the review of the first stage of its bailout this hasn’t particularly improved the appeal of the Euro today. Disagreements remain as pension reforms continue to provide a sticking point and the IMF remains concerned about the possibility of debt relief for the Hellenic nation.

Market Sentiment Turns Against Softening US Dollar

The strong rise of the Japanese Yen has been adding downside pressure to the US Dollar at the start of the week, as the Yen hit a fresh seventeen-month high against its safe-haven rival. Debate is continuing over how soon the Fed is likely to raise interest rates again, with the increasingly dovish assessment of markets eroding the ‘Greenback’. This afternoon two members of the Federal Open Market Committee (FOMC) are due to speak, with any signs of hawkishness from either expected to muster some support for the softened currency.

Disappointing Chinese Data Fails to Dent Australian Dollar

Stronger Australian Investment Lending and Home Loans figures have boosted the ‘Aussie’ today, offering reassurance in the outlook of the domestic economy. This largely mitigated the negative impact of a disappointing Chinese inflation report, which failed to show the expected uptick in inflationary pressure and raised fresh doubts over the rebalancing of the world’s second largest economy. Despite this the Australian Dollar has benefitted from the decline of the US Dollar and lower expectations of imminent Fed action.

New Zealand Dollar Rises Despite Weaker Card Spending

While New Zealand’s card spending slowed sharply from 0.7% to 0.1% on the month in March the ‘Kiwi’ has nevertheless been bolstered by increased risk appetite at the start of the week. The apparently diminished odds of the Fed hiking interest rates in the near future has alleviated some pressure on the Reserve Bank of New Zealand (RBNZ), who would likely be forced to counter further US tightening with another rate cut. As a result the appeal of the New Zealand Dollar has been heightened.

Canadian Dollar Slumps as Oil Rally Slows

Although a lower-than-expected US oil rig count had pushed the price of Brent crude back above $42 per barrel, the commodity has been slipping back somewhat on Monday. Markets are struggling to maintain an entirely optimistic mood, allowing the Canadian Dollar to cede some of its recent gains. Demand for the ‘Loonie’ is expected to remain muted ahead of Wednesday’s Bank of Canada (BoC) policy decision, despite expectations that policymakers will hold steady.