Sterling gained some support during Tuesday from speculation that talks between the government and Labour Party were making progress.

The dollar continued to move lower on Tuesday with month-end positioning pressures having some negative impact. Sterling posted notable gains on month-end factors.

Confidence in the Euro-zone outlook and Euro was boosted by stronger than expected first quarter GDP data with EUR/USD above 1.1200.

The US S&P 500 index posted a fresh record high on Tuesday while market holidays in Asia curbed equity-market activity on Wednesday.

Risk appetite recovered from a brief setback with a lack of defensive support for gold and the Swiss franc.

Oil prices surrendered gains after a larger than expected API inventory build as violent clashes and coup speculation in Venezuela contributed to volatile trading.

Sterling gained some support during Tuesday from speculation that talks between the government and Labour Party were making progress. There were, however, no substantive developments with reports that the talks needed to conclude by the middle of next week. The government will be under increasing pressure to take action in order to avoid holding European elections later this month. There was also further speculation that Conservative Party activists would force a no-confidence vote in Prime Minister May with the party expected to lose a substantial number of seats in Thursday’s local elections.

The UK currency also gained an element of support from increased optimism over the European and global growth outlook.

Month-end positioning often drags Sterling lower but flows provided net currency support this time around. GBP/USD pushed to highs near 1.3050 while GBP/EUR rallied to just above 1.1600. The UK currency held steady on Wednesday ahead of the manufacturing PMI data with market expectations of a slowdown for the April data.

Economic Calendar

07:00GBP Nationwide House Prices (Y/Y)(APR)0.70%0.70%
07:00GBP Nationwide House Prices (M/M)(APR)0.10%0.20%
09:30GBP PMI Manufacturing(APR)-55.1
09:30GBP Mortgage Approvals(MAR)-64.34K
13:15USD ADP Employment Change(APR)175K129K
14:30CAD RBC Manufacturing PMI(APR)51.550.5
14:45USD Manufacturing PMI(APR)52.452.4
15:00US Manufacturing ISM(M/M)(APR)5555.3
15:30USD Crude Oil Inventories-5.479M
19:00USD FOMC Statement--
19:00FOMC Interest Rate Decision2.50%2.50%
19:30FOMC Press Conference--
21:15BoC Gov Poloz Speaks--
23:45NZD Building Permits (M/M)(MAR)-1.90%

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.