The Pound eventually shrugged off any negative news over Northern Ireland as has been the case on several occasions during the last months. Sterling recovered, trading 1 cent higher v Dollar from Thursdays lows, also recovering the losses seen against the Euro (+ 0.50 cents). UK economic growth prospects from the success of the vaccine roll out continues to attract buyers on any signs of weakness. At the G7 talks however, one cannot rule out comments from leaders on the Northern Irish issues today or over the weekend. UK April GDP just undershot consensus today (+2.3%, expected +2.4%), the Pound however is still holding on the highs seen during the Asian session..
Thursday saw U.S. CPI prices rise year on year by 5%, higher than the consensus of 4.7%. Although the US Dollar traded firmer prior to the data release, not for the first time this year, investors sold the Dollar again across a broad range of currencies on this higher reading (Sterling the main beneficiary) as the long term down-trend holds for the time being.
The ECB as expected left policy unchanged on Thursday. At the press conference, Christine Lagarde stated that although prices remain subdued, the ECB remain optimistic on economic growth, raising forecasts for 2021/2022 on inflation and GDP. The Euro is now trading at the upper end of this week’s range, yet to test $1.2200.