The pound is mixed this morning, gaining against the broadly stronger dollar, but consolidating against the euro after UK consumer confidence slumped to its weakest level since 2009. The consumer confidence gauge fell to –31 in April from –28 in March, indicating that government’s budget cuts start to take effect. The UK economy remains under pressure with inflation mounting twice the BoE’s 2% target and as government implies tightest fiscal squeeze in 60 years. Yesterday’s data revealed that UK economy expanded by 0.5% in the first quarter of the year, but the figure failed to reassure investors that economy is growing fast enough. Expect for the pound to remain in current levels versus its major rivals as there are no data releases or policy speeches scheduled for reminder of the week.
The dollar dropped across the board during the overnight trade as Federal Reserve pledged to keep interest rates unchanged at their latest meeting. The greenback tumbled after Fed Chairman Ben Bernanke signaled yesterday in his press conference following a policy decision that the central bank intends to maintain its 600 billion dollars monetary stimulus. Looking ahead to today, US first quarter gross domestic product (GDP) headlines the economic calendar, with the expectations for the economy to expand by 2% in the first three months of the year. Expect for the dollar to remain in current ranges against the majors as US central bank continues with its loose fiscal policy.
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