Market confidence is on the rise, once again, following stellar economic numbers released in the States. US GDP surged to 3.3% p.a., up from the expected 2%, while the PCE inflation number indicated that the Fed was on track. The news was all good from the US and this allowed bond yields to drift lower and confidence to rebound. The ECB left interest rates unchanged, in their latest decision, with the next move expected to be a rate cut in the second quarter. This allowed the EUR to drift back to 1.0820, while the GBP slipped below 1.2700.
The positive economic news had bond yields drifting lower and the commodity currencies reasonably stable. The AUD traded above 0.6550, while the NZD looked to hold 0.6100, awaiting the latest Tokyo CPI number. Australia celebrates Australia Day today, so markets will be closed, but the latest PCE reading will be released tonight in the USA.
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