THE pound is set to take centre stage today with first quarter GDP due out at 9:30am. A figure in excess of 0.7 per cent could well see further sterling-dollar gains towards $1.6800 on a break above the recent highs of $1.6600. A figure below 0.5 per cent could well see the pound slip back towards the $1.6000 level. CMC Markets spread is $1.64605-$1.64630.

Diverging interest rate expectations between Frankfurt and Washington helped propel the euro to fresh 17 month highs against the greenback during yesterday’s trade. However, the Fed’s decision to move to a press-conference format as opposed to a simple release of the FOMC minutes for the first time in the central bank’s history may inject some fresh direction into the equation when Bernanke faces the media later this evening. IG Index current price on euro-dollar is $1.4623-$1.4625.

The UK GDP reading that’s due for release later this morning will have left many sitting on their hands, reluctant to commit to new exposures at the risk of getting caught out by any surprises. Although the outlook for the US economy may remain bleak, there’s still the very real prospect that UK plc’s recovery also remains some distance from finding its stride. Current IG Index price on sterling-dollar is $1.6456-$1.6458.

With Australian dollar-dollar at such extended levels and still at risk from moves by China to rein in inflation, we like to short dollar-Canadian dollar to play the commodity currency theme going forward. The economic fundamentals out of Canada are good too, which should lend the Canadian dollar some support versus the dollar as the Bank of Canada looks closer to hiking rates than the Fed. Forex.com offers a price of Ca$0.9507-CA$0.9510.