Inflation data from the UK see’s the pound soar - Page 2 of 2

US Dollar:
In general, good news on the economic and corporate earrings front means the only question marks are things coming out of left field like the Goldman Sachs issue and the Greek issue. With the stock markets continuing to trade higher and global risk remaining in the markets, the dollar has seen a sell off against the majors, and even the euro has come to join the party this morning. The dollar has fallen under the $1.54 against sterling for the second time in the last two days and a decline of half a cent against the single currency has seen EUR/USD trade closer to the $1.3450 mark. Stock markets are continuing to trade higher as corporate earnings continue to post better than expected results, leading the dollar lower.
Data 15.15: Crude Oil Inventories. Speakers 15.15: Fed Chairman Bernanke.

Pound:
Sterling rode the risk appetite wave yesterday and continued to make gains against the majors. A surprise rise in UK inflation also gave the pound a boost as the CPI number rose to 3.4% from 3% in February. This is the fourth consecutive month that inflation has remained above the Bank’s target 2% target. Analysts said that if data out this week showed that the economic recovery gathered pace in the first three months of the year, the Bank may consider brining forward its plans for monetary tightening and raise rates—usually currency friendly. Sterling jumped after the data was published, hitting a session high of $1.5434 before ending the day up 0.3% at $1.5372. Against the euro there was also another move higher as the pound took another half a cent of its European counterpart to push GBP/EUR up to the 1.1450 level. In the UK, confidence is coming back following upbeat earnings from both sides of the Atlantic. Traders now look toward economic data including UK unem¬ployment and average weekly earnings, both at 09.30 today.
Data 09.30: MPC Meeting Minutes, Claimant Count Change expected –7.6k from –32.3k, Average Earn-ings Index 3m/y expected 2.5% from 0.9% & Unemployment Rate expected 7.8% unchanged.

Euro:
The euro remains under pressure Wednesday against the pound, dollar and yen, weighed down by lingering concerns over Greece’s fiscal issues. Analysts remain fairly downbeat on the euro’s short-term prospects. Euro¬pean growth looks set to be anaemic this year and sovereign solvency issues are likely to linger. Against the pound, the single unit also took a hit after better than expected inflation data from the UK was published, push¬ing the euro down another 0.3% to 0.8767. The euro also continued its demise against the greenback as we saw $1.34 breached in the early hours of this morning, although a small bounce in the single currencies favour has seen it go to $1.3429.
No major data.

General:
• On Tuesday, central banks in Canada, Australia, Sweden and India highlighted a global recovery that continues to gain traction, increasing the likelihood other central banks will also begin the path to tighter monetary policy. The high yielding currencies of countries that are tightening policy are continuing to outperform the euro, pound and yen.

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GBP/USD	1.5368
GBP/EUR	1.1405
EUR/USD	1.3462
GBP/JPY	142.62
GBP/AUD	1.6515
GBP/NZD	2.1565
GBP/ZAR	11.3784
GBP/CHF	1.6350
GBP/CAD	1.5523
GBP/SGD	2.1121
GBP/THB	49.22
GBP/HKD	11.9125 red-down; blue-up (snap shot)