Publication date: 13 May 2011 Author: Mark Bolsom, Travelex Focus in currency markets is still placed at the doorstep of the European debt crisis, which will likely be the driver for trade in the days to come. EU and IMF officials continue to evaluate the progress Greece has made towards achieving its goals of deficit and debt reduction. An opinion is expected to be formed before next week’s meeting in Brussels with Finance ministers and EU officials. With this as a backdrop any reaction to flash estimates of first quarter GDP figures is likely to be temporary. The euro zone growth figures are expected to see gains over the prior quarter and could initially support the euro. In the UK, sterling trade suffered a set back yesterday on weaker than expected industrial and manufacturing output figures. The weaker data limits the likelihood of any upside revision to first quarter GDP. There is very little on today’s local agenda, suggesting that cable will follow euro/dollar developments. In the US, economic data was released more or less in line with forecast yesterday, with the exception of improved weekly jobless claims that supported risk appetite. Today, CPI figures will be watched. Inflation is seen at 0.4%, while core rates are expected to remain benign. The inflation data will be followed by a consumer confidence survey from the University of Michigan that is forecast to see a small gain.

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