Like the Euro, the British pound has also strengthened today against the US dollar and Japanese Yen. There were only a few secondary reports released including wage growth, department store sales and the NIESR GDP estimate.
According to those reports, wage growth held steady, consumer spending growth slowed and GDP is estimated to be unchanged from the pace of growth seen in the first quarter. All three of these indicators are beginning to show the difficulties that the UK economy may be facing with the pressure of a strong currency and higher interest rates. We already saw the trade balance for the month of March hit a 10 month high. Next week, we expect similar weakness in unemployment, leading indicators and possibly even retail sales. As for PPI and CPI, the strength of the pound should alleviate inflation pressures. The Bank of England will also be releasing their quarterly inflation report, which tends to be a market mover.