Sterling surprised the markets on Tuesday as it strengthened on most of its counterparts, despite thin data throughout the European session. In Germany however, it was the turn of the German economic sentiment which rose significantly to 11.2 in April, up from 4.3 points in March. Despite surpassing expectations, sentiment within the German markets is very subdued, as concerns about the UK’s European Union status start to gather momentum.

Carney’s harsh words
Last night in London, Bank of England Governor Mark Carney spoke, unleashing harsh words to those in favour of a Brexit. Carney stated that the City of London would take a hit from a Brexit, and could potentially lose its status as the world’s leading financial centre. Despite Carney’s remarks, many believe that he is once again trying to scare the UK population into staying within the EU, by over exaggerating potential financial implications of a Brexit.

Sterling’s quarterly average earnings lower than expected
This morning saw sterling’s quarterly average earnings, which have come out slightly lower than expected. Claimant count change, which indicates how many have claimed unemployment benefits in the last month, has also placed significantly higher.

Later this afternoon, the head of the European Central Bank, Mario Draghi, speaks in Frankfurt. He’s expected to deliver a dovish outlook on the euro as inflation still hasn’t risen. Should this be the case, expect the euro to potentially weaken on the majors this afternoon. Elsewhere this afternoon, we have crude oil inventories and existing home sales out in the US session.

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Article by Callum McGrouther, Corporate Dealer
* Information courtesy of Currencies Direct
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