The Pound remained in a good place this week after data from the Service, Construction and Manufacturing sectors showed continued expansion during April. Sterling has risen to a new 22 month high against the Euro and an 8 month high versus the US Dollar.

This supports the view that the Bank of England will not seriously contemplate more quantitative easing for the UK when the Monetary Policy Committee (MPC) members meet next week.

The difficulties faced by the Eurozone were again evident this week after reports showed deteriorating economic activity and rising unemployment across the region. The financial market’s attention was heavily focused on the European Central Bank's (ECB) interest rate decision and press conference. Interest rates were left on hold and ECB President Mario Draghi again emphasised the downside risk but said that a rate cut was not discussed at the meeting.

There is also more risk for the Euro with elections taking place in France and Greece this weekend.

The US Dollar dropped significantly last week after worse than expected economic growth data and news that the Federal Reserve would still consider additional monetary stimulus if the economic situation in the States deteriorates. The mixed data that we have seen so far this week from the US means that the Dollar has failed to recover and a lot will rest on the non-farm payrolls data that is out this afternoon.

The 8 month highs that we are seeing to buy the US Dollar from Sterling represent fantastic value. It is worth bearing in mind that the last time we traded here the US Dollar then dropped 10 cents over the next two weeks as a result of risk aversion to the problems in Europe. It is fair to say those issues have still not been resolved.

The Reserve Bank of Australia (RBA) cut interest rates this week by half a percent, which was by more than the market had anticipated. Over the course of the week the Australian Dollar has weakened three cents against the Pound and provided the best levels to buy the Australian Dollar since November last year.

The RBA also reduced their growth and inflation forecast for the Australian economy in their Monetary Policy Statement earlier today.

The New Zealand Dollar has risen above the 2.00 level for the first time this year. We have actually seen the New Zealand Dollar drop 10% against Sterling in the last two months. Against expectation, New Zealand’s unemployment rate rose this week.

Canadian GDP reported at the beginning of the week showed that the economy contracted -0.2% last month. Leaving the exchange rates to buy Canadian Dollars from Sterling close to the best levels we have seen this year.