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Sterling has mixed day, as UK trade deficit widens

Sterling had a mixed day yesterday weakening off against the majority of currencies in the morning before strengthening against most in the afternoon.

Currency rates - May 16

EURO/GBP - 1.2570

US$/GBP - 1.5964

CHF/GBP - 1.5101

CAN$/GBP - 1.6148

AUS$/GBP - 1.6132

ZAR/GBP - 13.345

JPY/GBP - 128.29

HKD/GBP - 12.3991

NZD/GBP - 2.0851

SEK/GBP - 11.509

AED/GBP - 5.8631

US$/EURO - 1.2698

INR/GBP - 86.72

Data out yesterday revealed that the UK posted a slightly larger trade deficit than anticipated. The Bank of England inflation report will be the main focus today as investors look for signs that further quantitative easing could be implemented in the upcoming months.

The euro suffered further losses today as it was confirmed that Greece is set to have a new election in June after it failed to form a government despite multiple efforts. The euro started the day on a more positive note as GDP figures came in flat when a contraction was expected. This was largely to do with the much better than expected German preliminary GDP figures. Contrary to this, German ZEW economic sentiment figures came in much worse than the markets anticipated. Greece will form a temporary government today and whilst Consumer Price Index (CPI) data is released, the global focus will remain firmly on Greece; so call in now for the latest news and a live quote.

The US dollar strengthened further still with the markets extremely risk adverse due to speculation of a Greek exit from the euro. A bad day on the data front showed that retail figures had dropped by more than expected and figures depicting the change in the price of goods and services purchased by consumers came in flat.

Elsewhere, the Reserve Bank of Australia released its latest monetary policy minutes yesterday, stating their belief that the rate cut in May was necessary to stimulate growth. Data from Australia and Japan was released over night and manufacturing sales from Canada is released later on today.

http://www.youtube.com/watch?v=at1_TQv4EBI&feature=youtu.be