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Posted October 31st, 2012 by Charles Purdy

Smart Daily Currency Note – 31st October 2012 – The storm abates in the US, what about the Euro zone?

GBP/EUR – 1.2398
GBP/USD – 1.6086
EUR/GBP – 0.8062
EUR/USD – 1.2962
GBP/AED – 5.8982
GBP/AUD – 1.5502
GBP/CAD – 1.6064
GBP/CHF – 1.4982
GBP/HKD – 12.4712
GBP/INR – 86.78
GBP/JPY – 128.28
GBP/NZD – 1.9582
GBP/SEK – 10.6694
GBP/ZAR – 13.8721

Sterling

Sterling strengthened against the dollar for the first time in three days yesterday as retail sales figures supported the positive GDP data from last week indicating the UK is emerging from recession. Bond yields also fell, an indication that traders no longer fear intervention from the Bank of England, an indication that suggests the pound could see further gains. There is very little data out of the UK today. However, the Deputy Governor of the Bank of England speaks this evening so we could see markets react positively to any indication that he is against further intervention. Please call in for the latest rates and to discuss your requirements with your trader.

Euro

The euro made fairly positive gains yesterday following the news that Spain’s GDP had contracted by less than expected. Falling bond yields at the Italian 10-year bond auction also helped boost the euro as it represents lower borrowing costs and a reducing need for an Italian bailout. The Greek President announced yesterday that internal negotiations that were in line with the strict measures that the so called Troika (the European Commission, the European Central Bank and the International Monetary Fund) had now been completed to secure additional bailout funds. If this is true and Parliament ratifies the budget, then in theory Greece will not be leaving the Eurozone; however, we will have to await the official Troika report on Greece. Out today we have inflation data and the rate of unemployment across Europe; furthermore, we also have German retail sales figures and the benchmark 10-year French bond auction. So we could be in for a volatile day for the euro so please call in now for the latest news and changes in the euro rate.

US Dollar

The US dollar weakened yesterday against all other major currencies as speculation about the costs incurred from the ‘Frankenstorm’ Hurricane Sandy now appear less severe than initially expected. As a result, there is now less demand for safe haven assets. The New York Stock Exchange (NYSE) is reopening today after being shut for two consecutive days due to the due to weather the first time since 1888. It will be interesting to see how such the foreign exchange market reacts to the increased trading volumes across the market. Get the latest news by calling in.

Worldwide

Elsewhere, the Japanese yen rebounded in the early hours against most of its major peers following a smaller than expected round of asset purchasing by the Bank of Japan. The Hungarian forint was the stand out performer of the day strengthening against nearly all of its counter parts as its central bank cut interest rates for the third month in a row. The Polish zloty also performed well as risk appetite increased due to the anticipated financial impact of ‘Frankenstorm’ Hurricane Sandy now being less than initially predicted. Key data out today see’s the release of Canadian GDP figures; but, there is very little other data released. Call in now for the latest news and a live quote.

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Posted October 30th, 2012 by Charles Purdy

Smart Daily Currency Note – 30th October 2012 – Currencies are in the eye of the storm, waiting for direction

GBP/EUR – 1.2401
GBP/USD – 1.6042
EUR/GBP – 0.8061
EUR/USD – 1.2936
GBP/AED – 5.8924
GBP/AUD – 1.5480
GBP/CAD – 1.6057
GBP/CHF – 1.4996
GBP/HKD – 12.4372
GBP/INR – 86.63
GBP/JPY – 127.42
GBP/NZD – 1.9530
GBP/SEK – 10.7112
GBP/ZAR – 13.9235

Sterling

Sterling struggled yesterday following comments from the Bank of England’s chief economist who suggested that the UK’s fourth quarter GDP figures would be significantly lower than the previous quarter, citing the Olympics as the leading factor in the third quarter’s positive release. The UK Consumer Price Index (CPI) inflation data will be released today and is expected to reinforce the UK’s status as a semi-safe haven currency, potentially strengthening its position against the euro. Please call in for the latest rates and to discuss your requirements with your trader.

Euro

The euro struggled today as markets sought to correct risk; traders heading for safer havens of the Japanese yen and US dollar. The euro touched a three week low against the US dollar as fresh questions were posed about a Spanish bailout as the Spanish Prime Minister met his Italian counterpart, and as the German Finance Minister rejected further debt restructuring for Greece. Furthermore, Spanish retails sales data that was released showed a sharp drop which pushed the euro weaker still. The President of the European Central Bank’s is due to speak again today and his comments often cause volatility and create sharp swings in price if any comments of significance are made. Also today we have a benchmark 10-year Italian bond auction. Call in now for the latest news and changes in the euro rate.

US Dollar

The US dollar strengthened yesterday as risk aversion drove the market following the news that the New York Stock Exchange (NYSE) had shut for the first time since the 9/11 attack due to the fast approaching hurricane Sandy. The impact of the so called ‘Frankenstorm storm’ has been predicted to affect the lives of 50 million Americans and inflict billions of dollars’ worth of damage. Moreover, the bad weather is expected to have an effect on the US Presidential elections with 35% of undecided voters saying that bad weather will impact their decision to head to the polls. Consumer confidence figures released today is expected to be the only major announcement in the US and with the NYSE shut you can expect trading volumes to be much lower than normal. Get the latest news by calling in.

Worldwide

Elsewhere, the Hungarian forint was the worst performing currency yesterday as negotiations stalled between Hungary’s chief negotiator and the Troika with regards to a potential bail out. The Japanese yen also performed well yesterday in a risk adverse market and in anticipation of this morning’s central bank announcement. Call in now for the latest news and a live quote.

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Posted October 29th, 2012 by Charles Purdy

Smart Daily Currency Note – 29th October 2012 – Lots of data this week – lots of reasons for exchange rates to move

GBP/EUR – 1.2444
GBP/USD – 1.6058
EUR/GBP – 0.8031
EUR/USD – 1.2897
GBP/AED – 5.8987
GBP/AUD – 1.5526
GBP/CAD – 1.6052
GBP/CHF – 1.5048
GBP/HKD – 12.4481
GBP/INR – 86.71
GBP/JPY – 127.92
GBP/NZD – 1.9576
GBP/SEK – 10.7961
GBP/ZAR – 13.9431

Sterling

After the gains made on Thursday, sterling remained fairly range bound on Friday, although it did drop below the key support level of 1.61 against the US dollar in reaction to the strong GDP data coming from the United States. Expect nervousness this week as the world gears up for a potential changeover of power on the other side of the Atlantic. The pound may continue to perform relatively well following the good GDP data from the UK last week as Britain begins to appear a safer option in an increasingly risk averse market. Manufacturing and construction Purchasers Managers Index (PMI) figures are released in the latter part of the week and will be closely monitored by investors as poor data could indicate that last week’s GDP figures were mainly down to the ‘Olympic effect’. If this is so, expect to see a harsh reaction as traders lose faith in the legitimacy of the UK economic recovery. Please call in for the latest rates and to discuss your requirements with your trader.

Euro

The euro had a poor day on Friday as Standard and Poor’s (one of the big 3 credit rating agencies) downgraded a raft of French banks and Spanish unemployment reached fresh highs of 25% making it ever more likely that they will make a formal request for a full government bailout. On a more positive note, German consumer climate figures were better than expected; but, this had little effect on the euro’s relative strength. Problems in Greece and the delays surrounding the potential Spanish bailout are likely to dominate the headlines in Europe this week and any significant news will cause a lot of volatility in the market. This week, manufacturing PMI data will be released across Europe, we will have benchmark 10-year Italian and French bond auctions and the President of the European Central Bank (ECB) is also speaking. Call in now for the latest news and changes in the euro rate.

US Dollar

The US dollar had a mixed day on Friday following the third quarter GDP figures being released showing growth of 2% which was above market expectations of 1.8%. Manufacturing PMI figures and consumer confidence data will be released this week alongside a raft of unemployment data which includes the highly influential non – farm pay roll data which will be announced on Friday and is always watched extremely closely by investors. Much focus will also be given to the run up to the US Presidential elections on November 6th. Get the latest news by calling in.

Worldwide

Elsewhere, the Japanese yen performed well on Friday as risk aversion drove the market and in anticipation of the central bank meeting early on Tuesday morning. Some traders are speculating that the Bank of Japan may initiate another round of quantitative easing in an attempt to spur on growth. The Hungarian forint was one of the worst performing currencies on Friday after rumours spread stating that the so called Troika has halted talks of a potential bail out. This week, one of the main releases will be the Chinese manufacturing PMI data as its release plays a big part in influencing the relative strength of the commodity backed currencies. Other data released includes GDP figures and unemployment data from Canada, whilst we have building approvals figures and inflation data from Australia. Call in now for the latest news and a live quote.

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Posted October 26th, 2012 by Charles Purdy

Smart Daily Currency Note – 26th October 2012 – Finally some good news for sterling

 

This week (Last week) GBP/EUR – 1.2452 (GBP/EUR – 1.2278) GBP/USD – 1.6112 (GBP/USD – 1.6034) EUR/GBP – 0.8031 (EUR/GBP – 0.8136) EUR/USD – 1.2924 (EUR/USD – 1.3054) GBP/AED – 5.9151 (GBP/AED – 5.8861) GBP/AUD – 1.5601 (GBP/AUD – 1.5477) GBP/CAD – 1.6046 (GBP/CAD – 1.5808) GBP/CHF – 1.5071 (GBP/CHF – 1.4841) GBP/HKD – 12.4861 (GBP/HKD – 12.4301) GBP/INR – 86.24 (GBP/INR – 86.08) GBP/JPY – 128.72 (GBP/JPY – 127.23) GBP/NZD – 1.9671 (GBP/NZD – 1.9561) GBP/SEK – 10.8241 (GBP/SEK – 10.5382) GBP/ZAR – 14.0891 (GBP/ZAR – 13.8611)

 

Sterling

 

Sterling started the week poorly dropping to a six month low of 1.2245 against the euro and one and a half month low of 1.5905 against the US dollar before rebounding strongly yesterday after better than expected third quarter GDP figures were released. The GDP data came in well above market expectations of 0.6% at 1%, pulling the UK out of recession. Even taking into account the “Olympic effect” these figures are still very encouraging; but, we will have to wait until the fourth quarter GDP figures are released to see if we really are out of the woods. More positivity came from by the Governor of the Bank of England on Tuesday night who indicated that he would hold back on another round of quantitative easing unless it was really necessary. It is a very quiet day on the data front today; but, we will have to see if sterling can maintain the significant gains it achieved yesterday or return to its downward trend against the euro. Please call in for the latest rates and to discuss your requirements with your trader.

Euro

The euro had a very strong start to the week following better than expected results at local Spanish elections for the Spanish Prime Minister and news that Ireland had secured an extension on its bailout. The positive trend ended as terrible manufacturing data was released across Europe and that German business confidence has fallen to the lowest level since February 2010. Euro weakness was the result and continued for the rest of the week. The Bank of Spain also said that the Governments budget plans for 2012 were ambitious given that the Spanish economy had contracted by 0.4% in the last quarter and for the fifth quarter in a row. German consumer confidence figures were released first think this morning and the main other release will be the Spanish unemployment rate which will be watched closely by investors as you would expect further increases in the unemployment rate would force the Spanish Government to request a full government bailout. Call in now for the latest news and changes in the euro rate.

US Dollar

The US dollar had a turbulent week as global risk sentiment continued to shift on news from Europe. The main US news came from the Federal Open Market Committee (FOMC) who decided to keep interest rates on hold as widely expected and that it would continue to buy $40 billion worth of long term securities until the middle of 2015. Positive data was released as the number of new homes sold in September and US durable goods orders rose by much more than expected. Other data released showed that the number of new people claiming unemployment benefits came out as expected but that the number of homes pending sale missed market estimates. The preliminary US GDP figures will be the headline release today and expectations will be high, especially after the stream of positive economic data out of the US and the strong GDP data out of the UK, and that it will be close to the forecast growth of 1.8%. Please call in now for the latest news and a live update.

Worldwide

Elsewhere, the Japanese yen has been one of the biggest movers this week, fluctuating aggressively as risk appetite and risk aversion continually switched places across the global market. The South African rand continues to struggle as unrest continues in the nation. The Canadian dollar also had a mixed week as investors bet on the likelihood of a central bank interest rate hike in the near term. Call in now for the latest news and a live quote.

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Posted October 25th, 2012 by Charles Purdy

Smart Daily Currency Note – 25th October 2012 – A positive day for sterling on Wednesday, what does Thursday hold?

GBP/EUR – 1.2363
GBP/USD – 1.6063
EUR/GBP – 0.8086
EUR/USD – 1.2992
GBP/AED – 5.8982
GBP/AUD – 1.5492
GBP/CAD – 1.5966
GBP/CHF – 1.4961
GBP/HKD – 12.4514
GBP/INR – 86.54
GBP/JPY – 128.71
GBP/NZD – 1.961
GBP/SEK – 10.7108
GBP/ZAR – 14.0151

Sterling

Sterling was one of the stand out performers yesterday, making good gains across the board as markets bet on positive GDP data being released today. Furthermore, sterling was buoyed by the comments made by the Governor of the Bank of England on Tuesday night who seemed to indicate that he would hold back on another round of quantitative easing unless it was really necessary. This positive move for sterling came despite a raft of poor data being released by the Confederation of British Industry (CBI). Analysts expect good news from the GDP data released today with current estimates suggesting growth of 0.6%, however, if the figures come in below expectations expect sterling to fall sharply. The deputy Governor of the Bank of England is speaking today and markets will react swiftly to any indication he gives as to the future of monetary policy in the UK. So please call in for a price and to discuss the markets with your trader.

Euro

The euro was one of the worst performers yesterday as both French and German Flash Manufacturing PMI came out worse than expected. Other data released showed that German business confidence has fallen to the lowest level since February 2010 causing further euro weakness. Although the French PMI showed slightly less of a decline from September’s three and a half year low, it still came in worse than forecast. Eyes were on the President of the European Central Bank (ECB) speech, who revealed that the Troika had made no official proposals yet on Greece. This has impacted trader’s confidence and has caused volatility on the euro. There is very little data out of Europe today; but, global risk sentiment is taking its lead from what is happening in Europe at present; as a result, expect any unexpected news to have a knock on effect across the market. Call in now for the latest news and changes in the euro rate.

US Dollar

The US dollar had a mixed day yesterday as sterling and the Australian dollar were the best performers as the markets remained nervous in the lead up to the last Federal Open Market Committee (FOMC) meeting before the November presidential elections. On the data front, the main release out of the US showed that the number of new homes sold in September rose by 5.7% which was much more than initially anticipated. Out today we have the release of data showing the number of homes pending sale, figures showing the change in number of new people claiming unemployment benefits and figures depicting the change in the total value of new purchase orders placed with manufacturers for durable goods. Please call in now for the latest news and a live update.

Worldwide

Elsewhere, the Australian dollar had a strong day yesterday, gaining ground against all its major trading partners as faster than estimated inflation eased expectations of a cut in interest rates. Furthermore the slight strengthening in Chinese manufacturing allowed the Australian dollar to climb against its peers. It was a tough day for the South African rand as it continued to weaken against its major peers, despite improved inflation data reducing the likelihood of the central bank cutting interest rates. The Canadian dollar had a mixed day, remaining fairly range bound versus the US dollar and euro, whilst losing ground against sterling. Overnight we saw the release of the Reserve Bank of New Zealand’s interest rate decision; but, there is very little other data out today.

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Posted October 24th, 2012 by Charles Purdy

Smart Daily Currency Note – 24th October 2012 – Better day for sterling against the euro – will it last?

GBP/EUR – 1.2304
GBP/USD – 1.5983
EUR/GBP – 0.8126
EUR/USD – 1.2991
GBP/AED – 5.867
GBP/AUD – 1.5492
GBP/CAD – 1.5838
GBP/CHF – 1.4891
GBP/HKD – 12.3881
GBP/INR – 86.49
GBP/JPY – 127.56
GBP/NZD – 1.9652
GBP/SEK – 10.617
GBP/ZAR – 13.964

Sterling

Sterling had a mixed day yesterday, strengthening against a range of currencies due to its status as a safer haven than the “riskier” high yielding currencies; but, weakened off against the more traditional safe haven assets of the US dollar and Japanese yen. Sterling’s drop against the US dollar took it down to a six week low to of 1.5925 in the lead up to the US election and with so much continued uncertainty surrounding Europe. It is another quiet day on the data front for the UK; but, with so much data released across the rest of the world the probability for volatility remains high. So please call in for a price and to discuss the markets with your trader.

Euro

The euro struggled across the board yesterday as Monday’s positive sentiment ebbed away following the news that Moody’s (one of the big three credit rating agencies) downgraded five of Spain’s regions, including Catalonia, due to a lack of funds in the local governments. Furthermore, the Bank of Spain said that the Governments budget plans for 2012 were ambitious given that the Spanish economy had contracted by 0.4% in the last quarter and for the fifth quarter in a row. French and German manufacturing and services data released this morning are key indicators of economic health, and strong results, particularly for Germany, should boost the euro. Later, we could see more volatility as the markets wait on a speech from the European Central Bank President where traders will react to any hints to future monetary policy. Call in now for the latest news and changes in the euro rate.

US Dollar

The US dollar was one of the stand out performers yesterday, strengthening against most of the other majors as risk aversion drove the market, in part as a result of companies releasing financial reports below analyst estimates, highlighting the US dollar’s safe haven status. The markets hope to see some strong data coming out of the US today with the new home sales figures being released and a statement from the Federal Open Market Committee (FOMC) regarding the vote on interest rates and commentary about economic conditions. Please call in now for the latest news and a live update.

Worldwide

Elsewhere, for a second consecutive day, the big mover was the Japanese yen; rebounding strongly against most major counterparts as the release of weaker than expected global economic data sapped risk appetite. Elsewhere, the Canadian dollar also rallied, as the Bank of Canada’s policy statement suggested that an interest rate hike is becoming increasingly likely. Today sees the Bank of Canada release the monetary policy report, followed by a press conference which should give clearer indication on potential future monetary policy. The South African rand had a less favourable day, weakening to a one-week low against the US dollar as declining metal prices dampened the nation’s expected income from exports. Overnight, we saw the release of key inflation data from Australia and Chinese manufacturing data. Call in now for the latest news and a live quote.

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Posted October 23rd, 2012 by Charles Purdy

Smart Daily Currency Note – 23rd October 2012 – Is sterling heading for 1.20 against the euro?

GBP/EUR – 1.2272
GBP/USD – 1.6014
EUR/GBP – 0.8140
EUR/USD – 1.3034
GBP/AED – 5.8761
GBP/AUD – 1.5524
GBP/CAD – 1.5902
GBP/CHF – 1.4861
GBP/HKD – 12.4098
GBP/INR – 85.78
GBP/JPY – 127.88
GBP/NZD – 1.9602
GBP/SEK – 10.5596
GBP/ZAR – 13.8771

Sterling

Sterling dropped to a six month low of 1.2245 against the euro yesterday with increasing confidence in the Eurozone following the regional Spanish elections. Against the US dollar sterling strengthened in the morning only to weaken off in the afternoon. Data showing the number of new UK mortgage approvals in the last month will be released first thing this morning. The main focus though will be on the speech given by the Governor of the Bank of England this evening as investors look for indication of future monetary policy decisions from the Bank of England. So please call in for a price and to discuss the markets with your trader.

Euro

The euro performed strongly across the board yesterday as a better than expected result for the incumbent Prime Minister in Spanish local elections added some certainty to Spain’s presence in the Eurozone, and investors reacted accordingly. Sentiment was boosted further as the French President announced that he and the German Chancellor consider Ireland to be a special case and are seeking a deal on its bank debt, compounding the effect of this weekend’s announcement on a single bank supervisor. There is very little data out in Europe today except business climate figures from Belgium. Expect the markets to remain jittery in the lead up to Wednesday’s busy agenda which includes the ECB President’s speech and manufacturing and services Purchasing Managers’ Index (PMI) figures. Call in now for the latest news and changes in the euro rate.

US Dollar

Elsewhere, the big mover yesterday was the Japanese yen, losing ground against all of its major trading partners. The Japanese currency slid on the back of the weakest exports since 2011, with the economic minister suggesting that more Central Bank stimulus may be required to boost the economy. The Canadian Dollar continued to struggle, and much focus will be on today’s policy meeting, where the Bank of Canada are expected to place less emphasis on a potential rise in interest rates. Other data released from Canada this week includes retail sales figures, whilst the Bank of Canada will release its report on monetary policy as well as giving a press conference. There was better news for the South African rand yesterday, gaining versus all of its major peers, as foreign investors resumed the purchase of the country’s bonds. Call in now for the latest news and a live quote.

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Posted October 22nd, 2012 by Charles Purdy

Smart Daily Currency Note – 22nd October 2012 – Will UK growth be good news for sterling?

GBP/EUR – 1.2276
GBP/USD – 1.6038
EUR/GBP – 0.8141
EUR/USD – 1.3052
GBP/AED – 5.8856
GBP/AUD – 1.5542
GBP/CAD – 1.5916
GBP/CHF – 1.4849
GBP/HKD – 12.4278
GBP/INR – 85.98
GBP/JPY – 127.62
GBP/NZD – 1.9616
GBP/SEK – 10.5381
GBP/ZAR – 13.8212

Sterling

Sterling had a mixed day on Friday dropping at one stage below 1.60 against the US dollar. Against the euro it has stayed relatively range but did reach a four month low of 1.2270 in the early hours of the morning and the euro continues to be in the ascendancy. Public Sector Net Borrowing figures were better than expected falling to £12.8 billion providing some slight relief to the Chancellor as he tries to manage the ever growing debt pile. The preliminary GDP figures released this week will be the main release on the UK economic agenda and are expected to show modest growth of 0.6% for the third quarter which would be good news and provide a well needed boost to the state of the UK’s economy after three quarters of contraction. The Governor of the Bank of England will be speaking as will another member of the Monetary Policy Committee during the course of this week and it will be interesting to see their perspective of where the UK economy is. So please call in for a price and to discuss the markets with your trader.

Euro

The euro had a quieter day on Friday as Current Account figures came in lower than expected and due to the ongoing delay surrounding Spain formally requesting a bailout. The euro has had a good run on the commitment of the European Central Bank to support it and the main reason for this to change is that the politicians will again prevaricate and avoid difficult decisions and erode business confidence. At the EU Economic Summit, the Commissioner for Economic and Monetary Affairs said that a banking union, which would supervise all banks inside the Eurozone, would be operational in some form by the start of the New Year. This week is a busy week for data and we have the release of German, French and Euro area wide Manufacturing Purchasing Managers’ Index (PMI) figures, German business confidence data and the President of the European Central Bank (ECB) is also speaking. So plenty of opportunity for exchange rates to move quickly – call in now for the latest news and changes in the euro rate.

US Dollar

The US dollar performed well on Friday as Thursdays risk rally came to a close even though data released showed that the number of residential buildings that were sold during the previous month had beaten market expectations. It is a very busy week on the data front with the preliminary GDP figures being the headline release and current expectations are set for growth of 1.8%. Other data released this week includes the number of homes pending sale, figures showing the change in number of new people claiming unemployment benefits, the change in the total value of new purchase orders placed with manufacturers for durable goods and the Federal Open Market Committee (FOMC) statement on the state of the economy. Please call in now for the latest news and a live update.

Worldwide

Elsewhere, the Canadian dollar was one of the worst performing currencies yesterday as inflation data released on Friday came out lower than expected reducing the possibility of an interest hike in the near term and in particular at Tuesday’s central bank meeting. Other data released from Canada this week includes retail sales figures, whilst the Bank of Canada will release its report on monetary policy as well as giving a press conference. The Reserve Bank of New Zealand (RBNZ) is expected to keep interest rates on hold at 2.5% this week, Australian inflation data will be released as well as Chinese manufacturing PMI. Call in now for the latest news and a live quote.

If you haven’t opened a Smart account yet, call on 0808 163 0102 (+44 0207 898 0541) or fill out our online Account Form

Posted October 19th, 2012 by Charles Purdy

Smart Daily Currency Note – 19th October 2012 – Euro reaches fresh highs against sterling and the US dollar

This week (Last week)
GBP/EUR – 1.2278 (GBP/EUR – 1.2394)
GBP/USD – 1.6034 (GBP/USD – 1.6032)
EUR/GBP – 0.8136 (EUR/GBP – 0.8077)
EUR/USD – 1.3054 (EUR/USD – 1.2936)
GBP/AED – 5.8861 (GBP/AED – 5.8886)
GBP/AUD – 1.5477 (GBP/AUD – 1.5593)
GBP/CAD – 1.5808 (GBP/CAD – 1.5682)
GBP/CHF – 1.4841 (GBP/CHF – 1.4983)
GBP/HKD – 12.4301 (GBP/HKD – 12.4323)
GBP/INR – 86.08 (GBP/INR – 84.37)
GBP/JPY – 127.23 (GBP/JPY – 125.79)
GBP/NZD – 1.9561 (GBP/NZD – 1.9561)
GBP/SEK – 10.5382 (GBP/SEK – 10.7431)
GBP/ZAR – 13.8612 (GBP/ZAR – 13.8331)

Sterling

Sterling struggled against the majority of currencies this week and in particularly against the euro dropping to a four month low of 1.2275. It did reach 1.6175 against the US dollar as risk appetite drove the market but these gains have since been reversed. Inflation has reached its lowest level for almost 3 years in the UK dropping to 2.2% which put pressure on sterling. On a positive note unemployment data released showed that 4000 less people has applied for unemployment benefits during the past month and the overall unemployment rate had dropped by more than expected to 7.9%. Moreover, retail sales data released yesterday was better than expected with last month’s figure revised up to -0.1% and this month’s figure showing growth of 0.6% when only 0.4% had been expected. Public Sector Net Borrowing figures will be the key UK economic data released today, but, the main focus will be on the EU Economic Summit and any significant news that comes from it. So please call in for a price and to discuss the markets with your trader.

Euro

The euro performed well all week reaching fresh highs of 1.31 against the US dollar and 1.2275 against sterling thanks mainly due to increased market confidence in the Eurozone through a combination of improved German economic sentiment and increased speculation of a Spanish bailout. Furthermore, Moody’s (one of the big three credit rating agencies) announced that Spain was keeping its investment grade credit rating, which eased concerns surrounding the country and the region in general. Yesterday the EU summit started and will run through today with Germany and France, the two main powers of Europe having clashed over greater EU control of national budgets moving towards a single banking supervisor. Also in the near-bankrupt Greece, police clashed with protestors during the strike which has brought the country to a standstill. The markets will keep a close eye on the EU summit today and any significant news could cause a lot of volatility, so call in now for the latest news and changes in the euro rate.

US Dollar

The US dollar has weakened across the board this week as risk appetite increased following news released from Europe; but, strengthened on Thursday due to the uncertainty surrounding the EU Economic Summit and with the manufacturing data that was released being considerably better than anticipated. Other data released this week showed retail sales had increased by 1.1% in September, beating all expectations. Similarly new housing data in the US revealed an increase to a four year high in September which contrasted with worse than forecast unemployment data which showed an increase in the number of people applying for unemployment related benefits. Reports of a potential US credit rating downgrade are likely to hit hard as Pacific Investment Management, which runs one of the world’s largest bond fund, announced that this is likely by the end of the year. Out today we have the release of home sales data – a leading indicator of economic health, so we could see volatility following the release and the markets will hope for a positive release following the strong housing data released earlier in the week. Please call in now for the latest news and a live update.

Worldwide

Elsewhere, the Japanese yen has been one of the worst performers this week, struggling against its major counterparts as risk appetite has been the main driver in the market. Chinese GDP data confirmed that whilst the world’s second largest economy is still growing but that the growth rate continues to slow down. The South African rand has continued to fall following Standard & Poor’s (one of the big three credit rating agencies) cut the countries credit rating amidst industrial action taking place across the country. The Canadian dollar also struggled due to the Governor of the Bank of Canada hinting that he may look to lower Canada’s growth forecast; as a result, today’s inflation data could play a large part in the Canadian dollars relative strength. Call in now for the latest news and a live quote.

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Posted October 18th, 2012 by Charles Purdy

Smart Daily Currency Note – 18th October 2012 – Sterling slips to 1.2285 against the euro

GBP/EUR – 1.2304
GBP/USD – 1.6126
EUR/GBP – 0.8120
EUR/USD – 1.3101
GBP/AED – 5.9216
GBP/AUD – 1.5538
GBP/CAD – 1.5778
GBP/CHF – 1.4892
GBP/HKD – 12.4932
GBP/INR – 85.46
GBP/JPY – 127.72
GBP/NZD – 1.9628
GBP/SEK – 10.5852
GBP/ZAR – 13.8312

Sterling

Sterling struggled yesterday, dropping to 1.2285 against the euro in the early hours of Wednesday morning due to the euro’s increasing strength amidst rumours of an impending Spanish bailout and Moody’s (one of the big three credit rating agencies) confirmed Spain would keep its investment grade credit rating. Whilst sterling struggled due to an increase in global risk appetite, it continues to rise against the US dollar and the Japanese yen. The latest meeting minutes from the Monetary Policy Committee (MPC) revealed that all 9 members voted to keep interest rates and quantitative easing on hold as was widely expected. Unemployment data released yesterday was particularly upbeat with 4000 less people applying for unemployment benefits during the past month and the overall unemployment rate dropping by more than expected to 7.9%. Retail sales data released today, which measures the rate of consumer spending, is expected to show a marginal increase of 0.4% up from last month’s 0.2% drop. Whilst the retail sales figures will be watched closely by investors, any news from the EU Economic Summit is likely to have a much bigger impact on sterling’s strength, so please call to discuss expectations with your trader and for a live price.

Euro

The euro performed well yesterday, strengthening to a one month high against the US dollar of 1.3120 and peaking at 1.2285 against sterling before weakening off slightly as the day progressed. This shift can be largely attributed to Moody’s (one of the big three credit rating agencies) announcement that Spain was keeping its investment grade credit rating which eased concerns surrounding the country and the region in general. The EU Economic Summit starts today, where the heads of state will meet to discuss plans to create a closer fiscal union as well as discussing the on-going problems surrounding Greece and Spain in particular. Any news leaked from these meetings could cause a lot of volatility in the markets; furthermore, the markets will also focus on the benchmark 10-year Spanish bond auction as the EU Summit and Moody’s announcement draws more attention to it than normal, so call in now for the latest news and changes in the euro rate.

US Dollar

The US dollar was one of the worst performing currencies yesterday, weakening against all other majors yesterday due to the general increase in global risk appetite and following new housing data in the US revealing an increase to a 4 year high in September. This positive data will have a ripple effect on the US economy, damping demand for safer assets. Out today, we have the weekly release of data showing the change in the number of new people claiming unemployment benefits, whilst economic sentiment figures from US manufactures will also be announced. Please call in now for the latest news and a live update.

Worldwide

Elsewhere, the biggest mover of the day was the South African rand rebounding strongly against its major counterparts due to increased risk appetite following Moody reaffirming Spain’s investment grade credit rating. The commodity backed currencies performed well in general due to this renewed global appetite for risk with the Australian dollar, New Zealand dollar and Canadian dollar all strengthening. The Canadian dollar was particularly strong following the better than forecast housing data coming out of the US which helped the currency gain against its biggest trading partner as economic sentiment increased. Chinese GDP data was released over night and Swiss trade balance will be the main other piece of data released in what is a fairly quiet day on the data front; with most eyes firmly on the first day of the EU Summit. Call in now for the latest news and a live quote.

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