US Dollar selling interest seen from last week has halted for the time being as inflationary fears creep in. US consumer prices are expected to rise by the most in a decade as the base effect from last year’s pandemic collapse reaches its height. CPI is expected to climb 0.2% in April, according to the consensus forecast from a Reuters survey. The escalation of conflict in the Middle East between Israel and Palestine has attracted Dollar safe-haven buyers in Asia today, this also led to a sell-off in global stocks, most indices fell over 2% yesterday.

Sterling’s broad-based gains on the week have held with exception to the US Dollar (see above) ahead of UK Q1 GDP data. Against the Euro, key technical support is seen at €1.1600. Nevertheless, confidence remains high in the UK for a strong economic post lockdown recovery. A report in the Times newspaper today suggests the rebound will be so strong, there will be no need for the Chancellor to increase taxes. Sterling has so far held above $1.4100 overnight.

Investors are focused today on the US data, hence the pullback to the $1.2100 support zone.. The Euro remains under pressure against in demand Sterling.

Opening Interbank levels:
GBP/USD 1.4115
GBP/EUR 1.1640
EUR/USD 1.2120