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Cable edged a little higher on Friday morning before being driven lower again. We ended the week at fresh lows, challenging $1.3850, largely due to EU referendum fears. The BoE suggested UK interest rates could increase much before current market expectation, but this was largely ignored as the market sold Sterling.Sterling was down pretty much across the board, ranging from -1.6% against NOK through to -4.4% against CAD. The silver lining was feint, with +2% posted against the ZAR. But everywhere else it was down, down, down for the Pound.

Today’s mortgage approvals should have little impact on Sterling and later this week we have UK PMI data, but all domestic data releases will be overshadowed by the referendum, so one can see the polls and headlines driving GBP fortunes more than anything else and we have another four months of this market behaviour before Britain goes to the polls on 23 June

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On Friday, CPI inflation from Germany slowed to zero, which knocked the EUR. Draghi continues to claim that the ECB stimulus must be helped by fiscal stimulus (read ‘local tax measures’) but there has been little adoption of this, making it more likely for the ECB to increase stimulus. Today’s Eurozone CPI will be watched and a poor reading here may see further declines for the EUR, but with the ECB meeting in sight, the market may choose to sit on it’s hands.

ADP employment figures are expected this week and we’ll also see weekly jobless claims on Thursday and Non-Farm Payrolls on Friday. Current forecasts expect lower job creation numbers from February and with the current USD strength, there is a little uncertainty over when the US Federal Reserve might again look to raise interest rates. US GDP came in at +1.0%, taking the Fed’s annual inflation rate to 1.7% (up from 1.4%), but this is still below the 2% target and on it’s own probably doesn’t warrant another rate hike in March, but considering that when rates were raised last December, the Fed did warned the market to expect 4 rate rises this year, there is a question looming of when they’ll fit them all in.