The euro remains under pressure

The euro remains under pressure on the back of the dovish comments made by the European Central Bank (ECB) President Mario Draghi, an increase in tension in the Ukraine and some newspaper reports that Benoit Coure, a member of the ECB ruling council and seen as one of Draghi’s main allies at the ECB said at the weekend that the ECB is ready to make asset purchases if it deems then necessary to counter a too prolonged period of low inflation in the euro zone.

Meanwhile, audit firm Ernest & Young’s forecasting group, known as the Item Club predicted yesterday that UK Interest rates will remain at its historic low level of 0.5% until the third quarter of 2015.

It also predicted that economic growth, driven by improved consumer confidence will allow the rate to be increased gradually in the fourth quarter of 2015.

The Item Club also sees UK house prices rising by 7.4% this year and a further 7.2% in 2015.

Meanwhile, economists at Reuters reported yesterday that UK wages have returned to pre-recession levels with a 1.8% jump in the three months ending in February.

Since the financial crisis broke in 2008, inflation has almost consistently outstripped pay.

Meanwhile, property website Rightmove have reported that UK house prices are 7.3% higher in April 2014 compared to a year ago with the average price of a UK home now £262,594, marking the fastest annual rate of increase since October 2007.

Rightmove also warned that demand for homes had outpaced supply.

Miles Shipside, director of Rightmove said "Supply in much of the South is ridiculously tight, with 'for sale' board black spots in many popular locations within easy commuting distance of London. There are vicious circles where there is so little property for sale that few local home owners are willing to come to market to trade up, exacerbating the shortages and boosting sellers' pricing power."

US retail sales increased at a much faster rate than had been expected by analysts with 1.1% growth in March, the biggest gain in over a year.

Meanwhile, the World Trade Organization (WTO) has raised its 2014 forecast for growth in global goods trade from the 4.5% reported in September to 4.7%. On a more cautionary note, the WTO does not see a return to the historical trend level of 5.3% until 2015 due to the tepid pace of the European Union's (EU) economic recovery.

WTO economist Coleman Nee commented that "EU demand has been weighing on world imports for the past couple of years but it's starting to turn around. We will be watching very closely to see if the recovery in the EU disappoints".

In addition, WTO Director General Roberto Azevedo said it was unclear if trade had stopped growing at twice the speed of GDP on a permanent basis as this had been the trend until the global economic crisis and he hoped that protectionist policies would be removed as economic growth improved.