Euro drifts lower

The euro continued to drift down against the dollar yesterday. It fell literally to within a whisker of the bottom of the $1.2150 to $1.2550 range that’s been in place since the beginning of February – its low for the day was  about $1.2160 – before recovering a tad (though it remains below $1.22 this morning). With sterling also losing some ground against the dollar, euro-sterling is largely unchanged trading just below 87.5p   

US government 10-year bond yields continue to hover around the 3% level, having increased steadily – by circa 25bps – since the end of March. This rise in yields has helped to support the dollar over this period

The ECB Governing Council meets today and is expected to confirm its current monetary policy stance i.e. bond purchases (QE) to continue until September, at least, and interest rates to remain at their present level until well past the end of QE. The market will be interested to hear from Mario Draghi if the ECB intends to provide an update on its plans for QE at its next meeting in June – at this juncture, the market thinks QE will end in September or very shortly thereafter

The House of Commons debates the EU Withdrawal Bill today focusing on the custom union issue

Data scheduled for release include jobless claims and the trade balance n the USC