Sterling starts the day weaker than its euro and US dollar rivals compared to this time last Thursday, but is stronger against the dollar on a monthly footing.
On the data front, lots of interesting economic data was churned out for market watchers to digest yesterday. According to Eurostat, the Euro Area’s annual inflation rate was confirmed at 6.9% in March 2023, down for a fifth consecutive month. This marked its lowest level since February last year but is still above the ECB’s target.
In the UK, the latest retail price index increased 13.5% annually and 0.7% on a month-over-month comparison in March of 2023. The indexes were forecast at 13.3% and 0.6%, respectively.
Social media firm, Meta, announced it will cut 4,000 jobs immediately as part of its larger plan to cut 10,000 jobs. The company’s chief executive, Mark Zuckerberg, said the layoffs are part of the company’s “year of efficiency” – which is a plan to reduce costs as Meta struggles to monetize the metaverse (its virtual reality venture).
At lunchtime today, the US will release its latest initial jobless claims. In the previous data, markets saw the number of Americans filing for unemployment benefits rise by 11,000 to 239,000 in the week ending April 8th. This exceeded market expectations of 232,000 and marked the first increase in unemployment claims in three weeks.
The stock markets struggled to make any major moves on Wednesday, with the benchmark Stoxx 600 still down from a 14-month high on Tuesday.
Meanwhile in the US, The Dow lost 100 points on Wednesday afternoon. The S&P 500 and Nasdaq 100 were also down as investors digested fresh earnings reports and pondered the future path of interest rate rises.
Tomorrow, sterling watchers will be keeping a close eye on the latest monthly retail sales figures, which will be released at 7am. After unexpectedly surging 1.2% month-over-month in February, following an upwardly revised 0.9% rise in January, markets are expecting the retail sales index to fall on Friday.
Also on Friday, Federal Reserve governor, Lisa Cook, is scheduled to speak about economic research at an event in Washington DC. Many will be listening for any hawkish comments as these tend to be good for the US dollar.
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