Political factors remained important with Foreign Secretary Hunt stating that talks between the government and Labour Party were more constructive than people think.

Remarks from Fed officials over the need to meet inflation targets limited dollar support amid dovish medium-term expectations.

EUR/USD was little changed as narrow ranges prevailed with a lack of major new factors.

A relatively weak Bank of Canada outlook report undermined the Canadian dollar. Dovish Reserve Bank minutes also undermined Australian dollar support.

Equity markets held firm with a solid tone in risk appetite and significant Chinese market gains on Tuesday.

Oil prices posted net losses amid speculation over increased OPEC output later this year. Precious metals were unable to gain secured support amid a lack of support for defensive assets.

The first ONS economic activity indicator suggested a mixed performance for the first quarter and had little overall market impact. Although risk conditions were benign, a retreat in oil prices limited potential Sterling support.

Political factors remained important with Foreign Secretary Hunt stating that talks between the government and Labour Party were more constructive than people think. Sterling was able to make limited headway, although ranges were narrow as short-term volatility continued to decline sharply. There was further GBP/USD selling interest above 1.3100 while GBP/EUR retreated slightly to around 1.1550 as the UK currency struggling for direction.

There were media reports after the New York close that the Brexit talks would continue throughout the Easter recess, but markets were uneasy over underlying political stresses. GBP/USD held just below 1.3100 on Tuesday with GBP/EUR around 1.1600 ahead of the latest UK labour market data with the wages components important for interest rate expectations.

Economic Calendar

Expected Previous
09:30 GBP Average Earning Including Bonus(FEB) 3.20% 3.40%
09:30 GBP Claimant Count Change(M/M)(MAR) - 27.0K
09:30 GBP Unemployment Rate(FEB) 4.00% 3.90%
10:00 German ZEW Survey (Current Situation) (APR) 11.7 11.1
10:00 German ZEW Survey (Economic Sentiment)(M/M)(APR) -11 -3.6
10:00 EUR Euro-Zone ZEW Survey (Economic Sentiment)(APR) -9.5 -2.5
13:30 CAD Foreign Securities Purchase(FEB) - 28.40B
13:30 CAD Manufacturing Shipments (M/M)(FEB) 0.40% 1.00%
14:15 USD Capacity Utilization(MAR) - 78.20%
14:15 USD Industrial Production(MAR) 0.40% 78.20%
15:00 NAHB Housing Market Index(APR) 63 62
19:00 FOMC Robert Kaplan Speech - -
23:45 NZD CPI (Y/Y) 1.70% 1.90%
23:45 NZD CPI (Q/Q) - 0.10%

*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.