Dear Subscriber, Please find below today's update which gives you an insight into the current market conditions, enabling you to keep informed and up to date on the latest currency movements. GBPEUR/GBPUSD The Pound has slipped against the Euro and the U.S Dollar yesterday, falling from a 20-week high versus the U.S currency on a wider deterioration in risk appetite, despite a report that showed UK construction expanded at the fastest pace in 21-months in March. A gauge of building activity rose to 56.7, from 54.3 the previous month, adding to recent signs that the UK economy returned to growth in the first quarter and will avoid a technical recession. The British Chambers of Commerce also predicted the UK will not suffer a contraction in growth this year, fuelling optimism that the Bank of England will refrain from adding to the bond purchasing program again in May. There is indecision within the MPC though with two policy makers voting for an increase in quantitative easing last month, as the outlook for growth still remains a concern, especially with the threat of contagion from the Euro-zone still a threat. The Pound has also fallen from a yearly high of 1.5450 versus the Australian Dollar, despite the RBA displaying a willingness to cut interest rates again over the coming months. The Aussie Dollar dropped again overnight, however, after a report on the nation's trade balance showed an unexpected deficit, adding to pressure for the RBA to cut rates again as the economy slows. The UK services sector data will be watched closely this morning and another stronger-than-expected reading would reinforce a greater tone of economic optimism and the Pound is gaining as a result this morning prior to the figures being released. A separate report released earlier in the day showed that UK house prices rose by the most in three years in March, led by an increase in demand from first time buyers before the expiry of a tax holiday on some purchases. According to the report from Lloyds Banking Group Plc, house prices jumped 2.2% from February, which represents the biggest monthly increase since May 2009. Surveys this week on manufacturing and construction have raised optimism that the UK economy will avoid a recession, but consumers are still struggling with public spending cuts and inflation outpacing wage growth. EUR/USD The relatively subdued market conditions yesterday meant the Euro remained in a tight trading range versus the U.S Dollar, lacking the required impetus to break higher through the 1.3350 resistance level. There were further concerns surrounding the Spanish economy, which had an important impact in keeping the Euro lower. Following the budget cuts on Friday, the Spanish government presented detailed measures to parliament with spending cut substantially in order to meet fiscal targets. With unemployment rising to a fresh record high, there were renewed fears that growth would be even weaker-than-expected. The ECB interest rate announcement will be watched closely today and a tough stance on inflation could provide an element of support for the Euro. Risk appetite deteriorated over-night as equity markets reversed earlier gains and the Euro dipped sharply towards 1.33. The FOMC minutes confirmed that the committee was slightly more optimistic surrounding the economic outlook. The net outlook was to downplay the potential for further quantitative easing unless there was a renewed slowdown in the economy. If you need any further assistance, or require a live dealing quote - please do not hesitate to contact me on 01736 335250 or send an email to info@torfx.com Regards,
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