Markets calm, how long will it last? | Smart Daily Currency Note
GBP/USD – 1.5158
EUR/GBP – 0.8668
EUR/USD – 1.3138
GBP/AED – 5.5645
GBP/AUD – 1.4754
GBP/CAD – 1.5502
GBP/CHF – 1.4092
GBP/CNY – 9.42
GBP/HKD – 11.7512
GBP/HUF – 341.26
GBP/INR – 81.96
GBP/JPY – 140.04
GBP/NZD – 1.8232
GBP/RUB – 46.28
GBP/SEK – 9.7524
GBP/ZAR – 13.4112
Sterling, had a mixed day yesterday, starting off on the front foot by making gains against the majority of its trading partners before losing ground in the afternoon. Data released yesterday showed the first revision to the UK’s fourth quarter GDP figures which fleshed out the details of the 0.3% contraction seen during that period – with exports and imports both falling sharply. Sterling also enjoyed a temporary lift after one of Monetary Policy Committee (MPC) members from the Bank of England (BoE) quashed the idea of negative interest rates being introduced. With little data expected to be released from the UK today, the markets will most likely look elsewhere for influence. Call now for the latest updates on sterling.
Bond traders were clearly unfazed by news that the Italian comedian-turned-politician Beppe Grillo had rejected calls from the leader of the country’s democratic party to form a coalition majority, as Italy achieved its target in yesterday’s bond auctions. The euro was spurred by the news, as well as a report showing that economic confidence had improved last month, to gain against the dollar for the first day in three. Last night heard the President of the European Central Bank once again talking up the state of the Eurozone, saying that "we should build a strong and deep economic union in Europe"; whilst, at the same time stating that the ECB is far from exiting from stimulus measures. Today sees the release of both German and Eurozone Consumer Price Index data as well as consumer spending and employment releases, key fundamentals which will either support, or highlight the weakness in recent statements. Get in touch now for the latest news and rates.
The US dollar had a mixed day yesterday struggling in the morning but regained some of its losses in the afternoon. Positive Core Durable Goods Orders, rising by the highest rate in a year, and Pending Home Sales data both came out much better than expected. In his testimony the Federal Chairman suggested the benefits outweighed the negative with regards to the central bank’s asset purchasing program. The testimony gave no signs that the Fed may slow or even stop monetary easing, in spite of recent murmurings that the central bank may look to taper asset purchases. The Chairman also maintained pressure on Congress to act to prevent the USD 1.2 trillion of spending cuts that are due to start taking effect from March 1st reminding the Committee of the Congressional Budget Office’s forecast that US growth will be adversely affected by around -0.6% this year, and the labour market will lose 750k jobs, if the spending cuts are maintained throughout the whole year. Today we have Preliminary fourth quarter GDP data – expected to show 0.5% annualised growth – and the weekly unemployment claims coming out of the states. Call in now for the latest news and live rates.
Elsewhere, the Japanese yen was the stand out performer yesterday as risk aversion dominated the market due to political uncertainty in Italy. The Australian dollar struggled yesterday after worse than expected construction data was released whilst the commodity backed currencies struggled in general. Overnight we saw the release of business confidence figures from New Zealand whilst we saw a raft of data out of Australia including figures showing the change in the level of new capital expenditures made by private businesses. Later on today we have inflation data and current account figures from Canada. Call in now for a market update and a live quote.
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The Italian elections continue to worry markets | Smart Daily Currency Note
GBP/EUR – 1.1532
GBP/USD – 1.5114
EUR/GBP – 0.8665
EUR/USD – 1.3082
GBP/AED – 5.5514
GBP/AUD – 1.4786
GBP/CAD – 1.5492
GBP/CHF – 1.4077
GBP/CNY – 9.47
GBP/HKD – 11.7152
GBP/HUF – 341.49
GBP/INR – 81.03
GBP/JPY – 138.50
GBP/NZD – 1.8304
GBP/RUB – 46.16
GBP/SEK – 9.7372
GBP/ZAR – 13.3356
Sterling had a mixed day yesterday – starting off on the front foot reaching highs of 1.1650 against the euro and 1.5220 against the US dollar before losing ground later in the day. Sterling struggled after one of the Monetary Policy Committee (MPC) members from the Bank of England (BoE) suggested he was open to more monetary easing and furthermore, that the prospect of negative interest rates had been raised at central bank meetings. Furthermore, realised sales data from the Confederation of British Industry (CBI) came out lower than expected. Out today we have the second estimate of the UK’s fourth quarter GDP which is expected to show a contraction of 0.3%, the same as the first estimate. Moreover, more MPC members will be speaking today, and following yesterday’s volatility, the market will pay close attention to what they have to say. Call now for the latest updates on sterling.
It has been a turbulent few days for the euro, news of the inconclusive Italian election yesterday drove the euro to a seven week low against the dollar – whilst weakening by three cents against sterling. The damage was not as widespread as first feared however, as traders became confident that the European Central Bank (ECB) would intervene to limit the fallout, and the euro strengthened in the afternoon. Today is likely to be just as volatile with two important events. Firstly, we expect an Italian 10 Year Bond auction this morning – a key way for governments to borrow money and high yields mean high borrowing costs for the Italian Government. Secondly, in the afternoon the ECB President is speaking in Germany, we traditionally see a great deal of volatility during his speeches as markets look for hints as to future monetary policy. Get in touch now for the latest news and rates.
The US dollar generally performed well yesterday, strengthening against the majority of its currency partners with Consumer Confidence figures and New Home Sales data (rising in January to the highest since 2008) both coming out much better than expected. Along with this, the Federal Reserve Chairman backed the central bank’s current stimulus program, saying that they will support the asset purchases with “little risk of inflation or asset-price bubbles” causing the dollar to strengthen further. In the testimony he stated that “We do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery.” Although he also warned that the automatic federal budget cuts in line to begin 1st of March will add a “significant” burden to the economy if lawmakers are unable to avert from the reductions. Today we will see Core Durable Goods orders along with the second part of the Chairman of the Federal Bank’s “congressional testimony” on monetary policy.
Elsewhere, the Canadian dollar fell to a eight month low versus the US dollar following better than expected data out of the US and the comments from the Chairman of the Federal Bank. The commodity backed currencies struggled in general yesterday whilst the Japanese yen prospered due to risk aversion driving the markets and traders seeking safer havens for their money. The Russian rouble was one of the worst performers yesterday after GDP data released showed that the economy had contracted by 0.3%. Call in now for a market update and a live quote.
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Hung parliament in Italy keeps the roller coaster going | Smart Daily Currency Note
GBP/USD – 1.5168
EUR/GBP – 0.8595
EUR/USD – 1.3034
GBP/AED – 5.5756
GBP/AUD – 1.4796
GBP/CAD – 1.5562
GBP/CHF – 1.4140
GBP/CNY – 9.44
GBP/HKD – 11.7645
GBP/HUF – 342.72
GBP/INR – 82.14
GBP/JPY – 139.32
GBP/NZD – 1.8268
GBP/RUB – 46.47
GBP/SEK – 9.8420
GBP/ZAR – 13.4216
Yesterday was not for the faint hearted as the currency markets twisted one way and then the other as the news flow gathered pace. Sterling was aggressively sold off in early trading yesterday, reaching a sixteen month low against the euro and a 2.5 year low against the US dollar following Moody’s – one of big three credit rating agencies – downgrading the UK’s sovereign rating by one grade to Aa1 from Aaa. The bond markets appeared to pay little attention to the news, with yields on UK government debt little affected by the news. Weaker than expected mortgage approvals data did little to help sterling early on. However, sterling has staged a recovery, albeit I suspect short term one, in the late afternoon reaching as news of a hung parliament in Italy undermined the euro. Chancellor George Osborne spoke yesterday and confirmed that the government would not deviate from its current path in spite of the recent downgrade. Early this morning the Governor of the Bank of England will be speaking and later on today we also have the realised sales data from the Confederation of British Industry (CBI)and a report from the Governor of the BoE and its Monetary Policy Committee (MPC) members on inflation and the current economic outlook. Call now for the latest updates on sterling.
The euro had a mixed day yesterday reaching a 16 month high against sterling in the morning, as well as making significant gains versus the US dollar before a sharp sell-off in the afternoon. The euro performed well in early trading as there was a confidence in the market that the centre-left leader Bersani (the frontrunner) would win an outright victory. This confidence disappeared as figures began to show that Silvio Berlusconi may have built a up enough support to deny Bersani outright victory – which triggered speculation of another election and the euro was sold off across the board. European policy makers gave an improved outlook for the region with the European Union Economic and Monetary Affairs Commissioner talking down the risks around the region and saying that "reforms are starting to pay off, deficits are declining and Europe will gradually return to growth". However, the CESifo (an economic research group in Europe) warned that further austerity "will dampen economic activity in almost all member States" as well as stating that "domestic demand looks set to shrink further in 2013" due to high unemployment. This unemployment along with a number of poor developments may encourage the European Central Bank (ECB) to lower interest rates, which will force the Governing council to carry out its easing cycle across 2013 with this economic downturn causing price instability. We have a quiet day today in terms of data coming out of Europe; but, expect further aggressive movements in the markets once the final result from the Italian election is announced. We also have a speech a from the ECB President today, as well as an Italian bond auction. Call now for the latest news and live rates.
The US dollar had relatively strong day all round yesterday strengthening against most of its major currency partners as risk aversion dominated the markets due to fears over the Italian parliamentary election. The Chairman of the Federal Reserve, Ben Bernanke is due to feedback on the current monetary policy today and analysts expect the Chairman to outline his support for the current stimulus program. There will also be new residential sales data and consumer confidence figures. With a host of data released today, we could see a significant effect on the US currency, so call in now or a market update and a live quote.
Elsewhere, the Japanese yen was in the headlines once again due to rumours that the prime minister is close to nominating Mr Karudo as the next governor of the Bank of Japan. The yen dropped to a 3 year low against the US dollar following this announcement as Mr Karodu is a man who has clearly stated his willingness to increase monetary stimulus if necessary. Worse than expected Chinese manufacturing PMI released early on Monday caused commodity backed currencies to struggle. The Indian rupee has risen 1.5% year-to-date, starting the year on a strong footing following steps taken by the Indian government to manage its ‘twin’ deficits. The next catalyst for the rupee should be the Indian budget announcement later this week. In all likelihood, it is going to be the most austere budget in recent years as the focus of the government remains on managing its fiscal as well as current account deficit and reviving investment flows into the country. Call in now for a market update and a live quote.
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Sterling suffers from loss of UK’s AAA credit rating | Smart Daily Currency Note
GBP/USD – 1.5152
EUR/GBP – 0.8732
EUR/USD – 1.3216
GBP/AED – 5.5578
GBP/AUD – 1.4724
GBP/CAD – 1.5486
GBP/CHF – 1.4054
GBP/CNY – 9.43
GBP/HKD – 11.7416
GBP/HUF – 336.80
GBP/INR – 81.77
GBP/JPY – 142.58
GBP/NZD – 1.8087
GBP/RUB – 45.92
GBP/SEK – 9.6722
GBP/ZAR – 13.4212
Late on Friday, the UK lost its top credit rating from Moody’s, one of three credit rating agencies, who downgraded the UK debt by one grade to Aa1 from Aaa. This was not unexpected and is due to the bleak outlook for the nations growth and it was also noted by Moody’s that there are significant challenges that the government faces in trying to reduce public debt. Whilst a downgrade had been anticipated by many economists for some time, it still sent shockwaves through the market causing sterling to drop against all of its major trading peers bar the Japanese yen. Sterling had started Friday on the front foot reaching 1.1617 against the euro and 1.5310 against the US dollar before dropping off in the afternoon following comments from one of the members of the Monetary Policy Committee (MPC) who was urging for another round of quantitative easing. Perhaps the most influential release this week is the second estimate of the UK’s fourth quarter GDP which is expected to show a contraction of 0.3%. Other data released this week includes realised sales data from the Confederation of British Industry (CBI) and the Manufacturing Purchasing Managers’ Index (PMI) data which will be released on Friday plus several members from the MPC will be speaking this week. Call now for the latest updates on sterling.
The euro had a mixed day on Friday after better than expected German sentiment data helped support the euro as the markets hope this implies that the European powerhouse wont slip into recession. This positivity is in spite of figures released showing that the final reading for the last quarter German GDP showed a contraction of 0.6%. The downbeat EU economic forecast for the next two years prevented a euro rally as growth forecasts were downgraded significantly for both France and Germany, whilst predicting the Eurozone as a whole to contract by 0.3% in 2013. Furthermore, the news that banks were only repaying €61 billion from an expected €122 billion in the ECB’s LTRO repayment caused the euro to drop to a six week low against the US dollar. The Italian elections continue today and the markets remain nervous in anticipation of the result especially if former Prime Minister Silvio Berlusconi should win enough votes to achieve a hung parliament as political uncertainty would return and could unsettle the euro. Other data released this week includes manufacturing PMI, inflation data and unemployment data from Germany, whilst the President of the ECB is also speaking. Get the latest rate by calling us now.
The US dollar traded somewhat on the sidelines on Friday as news from the UK and Europe dominated the headlines. There is a raft of data out of the US this week which includes consumer confidence statistics, preliminary GDP figures which are expected to show modest growth of 0.5% for the fourth quarter of 2012, manufacturing PMI and the Chairman of the Federal Bank is speaking on several occasions. With so much data and commentary out of the US this week there is the possibility for a lot of volatility, call in now or a market update and a live quote.
Elsewhere, the Australian dollar performed well on Friday following comments from the Governor of the Reserve Bank of Australia who indicated that another interest rate cut was less likely. The Canadian dollar struggled on Friday, dropping to a seven month low against the US dollar after extremely poor retail sales data was released in conjunction with lower than expected inflation data. Chinese manufacturing PMI data was released early this morning and later on this week we have business confidence figure from New Zealand, private businesses expenditure in Australia, more manufacturing PMI data from China and GDP figures from Canada. Call in now for a market update and a live quote.
Another poor week for sterling, the US dollar is in the ascendancy | Smart Daily Currency Note
GBP/EUR – 1.1555 (GBP/EUR – 1.1606)
GBP/USD – 1.5268 (GBP/USD – 1.5542)
EUR/GBP – 0.8650 (EUR/GBP – 0.8607)
EUR/USD – 1.3205 (EUR/USD – 1.3364)
GBP/AED – 5.6036 (GBP/AED – 5.7042)
GBP/AUD – 1.4822 (GBP/AUD – 1.4981)
GBP/CAD – 1.5542 (GBP/CAD – 1.5556)
GBP/CHF – 1.4201 (GBP/CHF – 1.4312)
GBP/HKD – 11.8472 (GBP/HKD – 12.0245)
GBP/INR – 82.94 (GBP/INR – 83.72)
GBP/JPY – 142.45 (GBP/JPY – 143.50)
GBP/NZD – 1.8242 (GBP/NZD – 1.8223)
GBP/SEK – 9.7835 (GBP/SEK – 9.8131)
GBP/ZAR – 13.5392 (GBP/ZAR – 13.6650)
After another poor week for sterling dropping against all of its major counter parts and falling at one stage to a 15 month low against the euro and an 30 month low against the US dollar. The Bank of England (BOE) minutes revealed that three members on the Monetary Policy Committee (MPC), including the Governor of the BOE, voted for expanding the current levels of quantitative easing plus there had also been discussions about potentially cutting interest rates. More negativity was evident on Tuesday when rumours spread of a potential downgrade for the UK’s gold plated AAA credit rating. Whilst the overall unemployment rate did reach 7.8% in January, there are definite signs that the labour market is starting to recover. Employment reached an all-time record of 29.73 million in the last quarter of 2012 and the number of new people claiming unemployment related benefits dropped by more than expected. Sterling started to recover some of its losses yesterday as more positivity came when the Public Sector Net Borrowing figures came in better than expected with a surplus in January of £11.4bn (the largest in 5 years) and Industrial Order Expectations from Confederation of British Industry (CBI) were better than initially anticipated. With no significant data expected to be released today, you might expect a stable day for sterling; however, recent activity tells us how volatile and how unpredictable the markets can be, so call in today for the latest updates on sterling.
The euro has had a mixed week, starting off on the front foot following comments from an ECB Governing Council member and the German Chancellor who said that there was no need to intervene to weaken the euro as it was in a normal range. The six month economic sentiment surveys for Germany and the Eurozone were much better than expected with the German figures reaching a three year high. Yesterday we saw some unexpectedly poor manufacturing and services Purchasing Managers’ Index (PMI) data across Europe which caused the euro to fall against the majority of its major currency pairs. Traders eyes will now be geared firmly towards the Italian elections this weekend. Should former Prime Minister Silvio Berlusconi win enough votes to achieve a hung parliament, political uncertainty will return and this could unsettle the euro. The euro remains in a strong position against sterling in particular, but today will see the release of German business climate data and a EU economic forecast for the next 2 years for the Eurozone’s member states. Both sets of important information which will inevitably have a heavy influence on the euro. Get in touch now for the latest news and an up to the second quote.
The US dollar started off quietly this week, trading in fairly a narrow range due to lack of data released in the states and the markets being closed for Presidents’ Day. However, it made strong gains later in the week reaching a 30 month high against sterling and a one month high against the euro following the release of the latest Federal Open Market Committees (FOMC) meeting minutes. The minutes outlined that the Federal Bank should be prepared to vary the pace of quantitative easing, thus normalising monetary policy – a sign that the central bank is looking at tightening monetary policy going forwards. The minutes however, didn’t indicate as to when quantitative easing may end. Yesterday we saw the release of core Consumer Price Index data (CPI) and existing home sales data which came out better than expected. It wasn’t all positive as the weekly unemployment claims and the Philly Fed Manufacturing Index came out worse than forecast. We have a quiet day in the states today although one of the members of the FOMC is speaking in the afternoon. Call now for the latest news and updates.
Elsewhere, the New Zealand dollar was one of the worst performer this week following comments from the Governor of the Reserve Bank of New Zealand (RBNZ) who suggested that the central bank may look to intervene if the New Zealand dollar’s current strength persists. The Japanese yen had a mixed week after the G20 failed to single out Japan for its recent policies which have promoted yen weakness; but, comments from the finance minister who rejected the prime ministers idea of buying overseas bonds saw the yen rally. The Turkish lira struggled after the central bank cut interest rates by 0.25%. The Australian dollar performed fairly well following the minutes from the most recent monetary policy meeting indicating that another interest rate cut was less likely. Out today we have inflation data and retail sales data from Canada, so call in now for a market update and a live quote.
Down, down, down for sterling | Smart Daily Currency Note
GBP/USD – 1.5198
EUR/GBP – 0.8728
EUR/USD – 1.3258
GBP/AED – 5.5798
GBP/AUD – 1.4824
GBP/CAD – 1.5462
GBP/CHF – 1.4102
GBP/CNY – 9.47
GBP/HKD – 11.7792
GBP/HUF – 333.98
GBP/INR – 82.62
GBP/JPY – 142.02
GBP/NZD – 1.8165
GBP/RUB – 45.92
GBP/SEK – 9.6420
GBP/ZAR – 13.4964
The bad news keep on coming as sterling fell sharply yesterday, dropping to a 15 month low against the euro and its lowest since June 2013 against the US dollar. This happened after the Bank of England (BOE) minutes showed that three members on the Monetary Policy Committee (MPC) voted for expanding the current levels of quantitative easing. Furthermore the minutes revealed that there had been discussions about potentially cutting interest rates; although all members voted against a cut in interest rates. Unemployment data came out with a mixed signals. The number of people claiming unemployment benefits dropped by more than expected, but the jobless rate came out worse than predicted with a unemployment rate now reaching 7.8% in January. Out today we have the latest figures on Public Sector Net Borrowing and Industrial Order Expectations from Confederation of British Industry (CBI). Plenty of scope for further bad news for sterling. Not that long ago we were wondering if sterling would fall below 1.20 against the euro – under 1.14 seems very likely now! Call in today for the latest news and a live rates from our traders.
A mixed bag for the euro yesterday particularly in the shadow of the US dollar’s very strong performance. The euro reached a 15 month high against sterling following the minutes from the most recent monetary policy meeting in the UK but struggled against most of its’ other major currency partners. The German Chancellor’s statement that a EUR/USD rate between 1.30 and 1.40 was ‘normal’ gave some confidence in the market that the euro was not overbought. The markets will also be looking at Eurozone political developments this week, with a general election in Italy on the 24th-25th February and with Cyprus also probably heading to a second round of Presidential voting on the 24th as well. While the markets are probably assuming victories for pro-reform parties and/or coalitions, the potential remains for surprises, in Italy in particular. Should former Prime Minister Silvio Berlusconi win enough votes to achieve a hung parliament, political uncertainty will return in Italy and may dampen euro sentiment. Get in touch now for the latest news and an up to the second quote.
The US dollar performed extremely well yesterday reaching fresh eight month highs against sterling. Poor inflation data from the US as well as declining housing starts promoted risk aversion in the global markets. Other data released yesterday showed that building permits increased at their quickest pace since June 2008. Yesterday evening we saw further dollar strength following the release of the latest Federal Open Market Committees (FOMC) meeting minutes. The minutes outlined that the Federal Bank should be prepared to vary the pace of quantitative easing, thus normalising monetary policy – a sign that the central bank is looking at tightening monetary policy going forwards. Today we see the release of core Consumer Price Index data (CPI), weekly unemployment claims figures, existing home sales data and the Philly Fed Manufacturing Index being released in the US. Call now for the latest news and updates.
Elsewhere, the New Zealand dollar was the worst performer out of the major currencies yesterday following comments from the Governor of the Reserve Bank of New Zealand (RBNZ) who suggested that the central bank may look to intervene if the New Zealand dollar’s current strength persists. Another combatant for the currency war. The Swedish krona performed relatively well yesterday, reaching a 20 year high against sterling! There is little data expected to be released today, but, the Governor of the Reserve Bank of Australia (RBA) is speaking late this evening. Call in now for a market update and a live quote.
Sterling stays under pressure | Smart Daily Currency Note
GBP/USD – 1.5438
EUR/GBP – 0.8690
EUR/USD – 1.3415
GBP/AED – 5.6697
GBP/AUD – 1.4896
GBP/CAD – 1.5615
GBP/CHF – 1.4198
GBP/CNY – 9.6182
GBP/HKD – 11.9710
GBP/HUF – 334.39
GBP/INR – 83.51
GBP/JPY – 144.04
GBP/NZD – 1.8352
GBP/RUB – 46.35
GBP/SEK – 9.7274
GBP/ZAR – 13.6484
Yesterday sterling continued on its downward trend, weakening to a seven month low against the US dollar and pushing close to a thirteen month low against the euro, which we reached at the beginning of the month. Negative sterling sentiment continues to rise. Markets are waiting for this morning’s release of the Bank of England’s (BOE) minutes of its February meeting and rumours of a potential downgrade for the UK’s gold plated AAA credit rating have increased. We also have the release of unemployment data today, with the overall rate of unemployment expected to remain the same at 7.7%, whilst analysts expect an improvement in the number of new people applying for unemployment related benefits. The most eagerly anticipated part of the BOE’s minutes tends to be the breakdown of the members’ votes – market expectation is that all nine members voted against a change in interest rates and the current level of quantitative easing. Any difference from expectation could be negative for sterling. Call in today for the latest news and up to second price.
The euro had a mixed day yesterday, performing relatively well following the release of better than expected economic sentiment surveys which look at the relative six month economic outlook for Germany and the Eurozone as a whole. The German figures came out at a three year high which helped boost demand for the single currency as the market notes an increase in confidence for the region’s economic powerhouse. It is a fairly quiet day in Europe today with only inflation data from Germany and France of note on the economic calendar. Worries about the outcome of this coming weekends Italian election are beginning to undermine the euro – markets dislike uncertainty. Get in touch now for the latest news and an up to the second quote.
The US dollar was generally weak yesterday, seemingly due to an increase in global risk appetite rather than poor data out of the States. Today we have inflation data, building permits figures and perhaps more importantly the Federal Open Market Committee (FOMC) monetary policy meeting minutes released late this evening. This will be a major influencing factor and sure to have an impact on the markets as traders looks for clues as to when the central bank will look to tighten monetary policy or perhaps loosen it further still. Looking forwards, there is little more than a week until the "sequester" spending cuts in the US are automatically triggered which some fear could cause another economic downturn and perhaps push the US to fall back into recession. Call in now for the latest news and live rates.
Elsewhere, the Turkish lira was the worst performer yesterday after the central bank cut interest rates by 0.25% whilst the Canadian dollar continued to struggle. The Japanese yen performed well yesterday following the comments from the finance minister who rejected the prime ministers idea of buying overseas bonds. The Australian dollar performed fairly well following the minutes from the most recent monetary policy meeting being released which indicated another interest rate cut was less likely –whilst noting that the recent cut had helped boost the economy. Late last night we saw the Governor of the Reserve Bank of New Zealand (RBNZ) speaking and later on today we have economic sentiment surveys from Switzerland. Call in now for a market update and a live quote.
Sterling still friendless | Smart Daily Currency Note
GBP/USD – 1.5489
EUR/GBP – 0.8619
EUR/USD – 1.3356
GBP/AED – 5.6923
GBP/AUD – 1.4956
GBP/CAD – 1.5665
GBP/CHF – 1.4304
GBP/CNY – 9.6709
GBP/HKD – 12.016
GBP/HUF – 337.97
GBP/INR – 83.98
GBP/JPY – 144.84
GBP/NZD – 1.8347
GBP/RUB – 46.67
GBP/SEK – 9.8041
GBP/ZAR – 13.8485
Yesterday was a poor day for sterling, we saw a sharp drop in the morning against most of its major peers – reaching a seven-month low against the US dollar. The Bank of England has if anything come the closest of all central banks to acknowledging that a weak pound is part of their overall strategy for recovery and this was reinforced yesterday when one of the members said that sterling might need to weaken further still. Data released showing the change in the asking price of homes for sale was higher than expected helped support sterling, but not enough to regain all the losses from earlier. With little data out today we don’t expect to see large swings in sterling’s exchange rates, but sterling remains vulnerable due to the fragile state of the British economy so call in now for the latest news and live prices.
The euro had a fairly positive day yesterday following comments from the ECB’s Governing Council member who said that there was no need to intervene to weaken the euro and that it was in a “normal range” whilst the President of the European Central Bank highlighted that the exchange rate was not a policy target and that inflation was in line with expectations. Out today we have an economic sentiment survey which looks at the relative 6-month economic outlook for Germany and the Eurozone as a whole. Get in touch now for the latest news and an up to the second quote.
The US dollar traded in a fairly narrow range yesterday which was down to the US markets being closed for Presidents’ Day and therefore trading volumes were low. It is also very quiet in terms of data coming out of the US today with focus given to the economic sentiment figures released in Europe. All eyes will be on tomorrows Federal Open Market Committee (FOMC) monetary policy meeting minutes as it will be the major influencing factor, as well as inflation data and building permits which are also set to be released. Call in now for the latest update on the US dollars movements.
Elsewhere, the Canadian dollar struggled once more in spite of positive comments from Canadian central bank governor as traders view his sentiment as over optimistic. Today see’s the release of foreign securities purchasing data and wholesale trade data. Hopefully there will be positive news for the Canadian economy. Further violence took place at South African mines today which resulted in the South African rand weakening as investors remembered last year’s mining problems. The Japanese yen also continues to weaken due to the G20 failing to single out Japan for its recent policies which have promoted yen weakness, and as such it is unlikely to make much difference to the trend of yen depreciation. The minutes from the most recent monetary policy meetings in both Australia and Japan were released overnight and later on this evening we have inflation data out of New Zealand. Call in now for a market update and a live quote.
US dollar strength expected to continue | Smart Daily Currency Note
GBP/USD – 1.5477
EUR/GBP – 0.8617
EUR/USD – 1.3337
GBP/AED – 5.6816
GBP/AUD – 1.5031
GBP/CAD – 1.5589
GBP/CHF – 1.4302
GBP/CNY – 9.6298
GBP/HKD – 11.9906
GBP/HUF – 338.97
GBP/INR – 84.31
GBP/JPY – 145.50
GBP/NZD – 1.8354
GBP/RUB – 46.81
GBP/SEK – 9.7952
GBP/ZAR – 13.9456
Sterling performed relatively well on Friday, in spite of a sharp drop on very poor retail sales data released in the morning, it pared back all the losses to make gains across the board. The retails figures showed that the recent Christmas sales period was the second worst over the past fifteen years. The big story this week will be the release of the minutes from last week’s Monetary Policy Committee meeting on Wednesday; the key question being whether the nine members remain unanimous in holding interest rates and asset purchasing as is. Last week the Governor of the Bank of England said that if necessary more will be done, but that monetary policy is not a panacea and has limits to its efficacy. The ground may have been prepared, therefore, for some disparity of opinion – if we do see some, expect markets to react taking a position ahead of possible future changes. Get in touch now for the latest news and prices.
This week should be a volatile one for the euro, with influential data released on most days. However, if recent trends are anything to go by, it is output from the central bank that influences exchange rates more than anything at the moment so the President of the European Central Bank speech today will set the tone for the week. Last time he spoke he was unusually negative about the outlook for the Eurozone, and with a swathe of poor data out last week he seems likely to continue on that theme. With markets seemingly waiting on his every word, if the theme does continue, expect the euro to weaken. Later in the week, an economic sentiment survey and detailed manufacturing data are released from Germany. Given the poor GDP data last week, it would seem likely that these could disappoint which would be negative for the euro. Get in touch now for the latest news and an up to the second quote.
In the US on Friday, the empire state manufacturing index came out much better than expected and consumer sentiment figures also beat expectations. It is a bank holiday in the US today in observance of Presidents’ Day, so you can expect liquidity to be thinner than usual during US trading hours. There is a raft of important data released later this week, this include the minutes from the most recent monetary policy meeting from the Federal Open Market Committee (FOMC), two sets of key inflation data and we will also see more manufacturing data released. Call in now for the latest update on the US dollars movements.
Elsewhere, the G-20 meeting in Moscow was the talk of traders on Friday following recent comments about supposed ‘currency wars’. One direct effect of the meeting saw the Japanese yen continue to fall against the US dollar. In the closing statement after the meeting the finance ministers said that "G-20 countries have always held the position that currency policy should be based on market conditions"; however, the issue will always be a grey area when central banks decide to increase the level of monetary easing. Canada saw some unimpressive manufacturing data released which caused the Canadian dollar to weaken off, the Swedish Krona also weakened against most of its major partners; but, the New Zealand dollar performed well after impressive retail sales figures were released. This week we have the minutes from the most recent monetary policy meetings in both Australia and Japan; furthermore, from Canada we will see the release of key inflation data alongside retail sales figures. Call in now for a market update and a live quote.
Sterling continues to be the poor relation | Smart Daily Currency Note
This week (Last week)
GBP/EUR – 1.1606 (GBP/EUR – 1.1738)
GBP/USD – 1.5542 (GBP/USD – 1.5724)
EUR/GBP – 0.8607 (EUR/GBP – 0.8516)
EUR/USD – 1.3364 (EUR/USD – 1.3392)
GBP/AED – 5.7042 (GBP/AED – 5.7782)
GBP/AUD – 1.4981 (GBP/AUD – 1.5261)
GBP/CAD – 1.5556 (GBP/CAD – 1.5694)
GBP/CHF – 1.4312 (GBP/CHF – 1.4434)
GBP/HKD – 12.0245 (GBP/HKD – 12.2048)
GBP/INR – 83.72 (GBP/INR – 84.31)
GBP/JPY – 143.50 (GBP/JPY – 145.96)
GBP/NZD – 1.8223 (GBP/NZD – 1.8824)
GBP/SEK – 9.8131 (GBP/SEK – 10.0651)
GBP/ZAR – 13.6650 (GBP/ZAR – 14.0380)
After a stronger performance last week, sterling has struggled over the past few days – continuing on its recent run of form, weakening against the majority of its major trading partners including dropping to a fresh 6 month low against the US dollar. Sterling recovered slightly against the euro on Thursday following the news that the euro-area recession has deepened, erasing hopes that the EU economy is headed in the right direction. This week started with a report which showed that business confidence in the UK had hit a record low and Consumer Price Index (CPI) data came out as expected with a 2.7% increase. Sterling was sold off sharply on Wednesday following the comments from the Governor of the Bank of England where he suggested the UK faced “big challenges” ahead. Moreover, the Confederation of British Industry (CBI) lowered its growth forecasts for 2013 from 1.4% to 1%. Today sees the release of Retail Sales data, a primary gauge of consumer spending and one hopes this release will bring us some positive news – current projections are suggesting growth of 0.5%. Get in touch for an up to the second price, and more news.
It has been a mixed week for the euro this week. The early part of the week saw somewhat unjustified confidence in the Eurozone benefit the euro, but yesterday saw the rug pulled from underneath it. A whole swathe of data releases, including GDP data from the French and German core of Europe, came in below even pessimistic forecasts. The poor fundamentals highlighted how unjustified the recent strength in the euro has been, and it came crashing down to a 3 week low against the dollar. However, continued weakness in sterling meant the euro remained fairly flat against sterling trading in the 1.16 range for most of the day. Today the G20 talks start in Moscow with the “currency war” on top of the agenda, so expect the PR to begin again, whether markets react to it this as strongly as they have done in recent times remains to be seen. Get in touch now for the latest news and quotes.
The US dollar has had a poor start to the week following comments from the Federal banks Vice-Chairwoman who said that the central bank will use “forceful action to increase the pace of economic growth and job creation.” That being said, the US dollar has performed well against sterling and the euro reaching a 6 week and 3 week high respectively. President Obama’s speech late on Tuesday night included plans to use $1 billion to create 14 manufacturing institutes, change the tax code which benefits companies that expand in the US and create a trade deal with the EU. Retail figures emerged with no surprises though showing the expected steady growth of 0.1%. Today see’s the release of industrial production data and perhaps more importantly consumer sentiment data which will give a good indication of the state of confidence in the US as a whole. Call in now for the latest update and a live price from the market.
Elsewhere, as had been the current trend of late – the Japanese yen and the Bank of Japan has stolen much of the headlines this week. Early on Thursday morning the Bank of Japan voted to leave rates unchanged as widely expected and also left the stimulus program unchanged. The G20 summit starts today and much of the focus will be on Japan following the statement mid-week from the G7 condemning the recent “currency war”. The Swedish Krona rose to a four month high against the euro on Wednesday as the central bank chose to refrain from easing monetary policy, which would weaken the currency. The Hungarian forint struggled yesterday following the news that GDP had fallen by 2.7% in the fourth quarter. The New Zealand dollar performed well yesterday following the release of better than expected manufacturing data and late last night we saw the release of retails sales figures. Get in touch now for the latest news on your currency.