Sterling slowly loses ground | Smart Daily Currency Note
Sterling had a strong start to the day, rising to a ten-week high against the US dollar as an industry report showed UK house prices to have increased for the first time to levels last seen before the recession. Come the afternoon and overnight sterling lost ground. Sterling still remains supported from last Thursday’s growth figures, a dampened expectation that the Bank of England will boost stimulus measures and a renewed optimism for small businesses to take advantage of the revamped Funding for Lending scheme. However the benefits have been short lived and sterling has lost short term momentum. Data released today includes the net lending levels to individuals and mortgage approvals figures. Call in now to see how sterling reacts and for a live price from the market.
The euro bounced back yesterday as Italy finally formed a new government and swore in new Prime Minister Enrico Letta – ending a nine week deadlock. Indeed a successful Italian 10-year bonds auction confirmed investors’ confidence in the new appointment. Though the prolonged recession across the Eurozone is likely to undermine the new government’s ability to implement effective reform as other countries become increasingly reliant on monetary support. Today’s main release is expected to show unemployment in the Eurozone has reached record high and will put further impetus on the ECB to cut interest rates at Thursdays meeting in order to give the Eurozone a well needed boost. Other notable releases today include Spanish GDP figures and German retail sales data, so be in touch to see if fixing a price now could help you hedge against price levels slipping.
The US dollar struggled yesterday as the markets anticipate that the Federal Bank will remain on its current monetary stimulus program come Thursdays central bank meeting. Data released yesterday showed a better than expected reading for the number of homes pending sale; however, Februarys figure was revised downwards painting a mixed picture in the housing market. Other reports yesterday showed personal spending slowing last month – in line with a recent slew of weak data coming from the US, as incomes increased less than forecast and inflation cooled to the lowest level in more than three years. Today sees the release of consumer confidence data which is expected to provide some better news at last. The US dollar remains weak after the disappointing first quarter GDP figures; but with a busy week ahead, the potential for volatility remains high. Call in for the latest developments and prices.
Elsewhere, the Polish zloty saw its best gains in three weeks ahead of the European Central Bank’s interest rate decision, indeed commodity backed currencies performed well yesterday with the South African rand and New Zealand particularly strong as the chances of an interest rate cut in Europe gathered pace and as analysts remain confident the US will maintain its stimulus program. The Canadian dollar rose to its highest level in two weeks yesterday against its US counterpart; buoyed by increasing prices for crude oil, the country’s largest export. Overnight we saw the release of business confidence data from New Zealand and later on today we have GDP data released from Canada which is currently expected to show growth of just 0.2%. Call in for feedback on market reactions and up-to-the second price levels.
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Sterling still strengthening | Smart Daily Currency Note
GBP/EUR – 1.1872
GBP/USD – 1.5524
EUR/GBP – 0.8421
EUR/USD – 1.3064
GBP/AED – 5.6824
GBP/AUD – 1.5032
GBP/CAD – 1.5748
GBP/CHF – 1.4608
GBP/CNY – 9.56
GBP/HKD – 12.0322
GBP/HUF – 358.16
GBP/INR – 84.21
GBP/JPY – 151.82
GBP/NZD – 1.8182
GBP/RUB – 48.54
GBP/SEK – 10.1412
GBP/ZAR – 14.0546
Sterling continued its upward trend on Friday strengthening for a fifth day against both the euro and the US dollar following Thursday’s news the UK had avoided a triple-dip recession and grown slightly beyond expectations. The main data released this week will be the Purchase Manager’s indices (PMI) for the manufacturing, construction and services sectors. At present, the manufacturing and construction sectors are both expected to show their respective sectors are contracting whilst the services sector (which makes up nearly 70% of the UK’s output) is predicted to be show slight expansion. Other data released this week includes the net lending levels to individuals, mortgage approvals figures and house price data. With recent good news, analysts hope for a gradual improvement across the board, but it remains a slim margin whether developments impact positively or negatively on the sterling, so call in to keep abreast of reactions and price levels throughout the week.
The euro struggled on Friday as leading banks continue to speculate that the European Central Bank (ECB) will look to cut interest rates at Thursdays central bank meeting. The ECB published two sets of data on Friday showing lending across its 17 nations remains at low levels as businesses struggled with weak demand and difficulty in obtaining financing. The Spanish government downgraded its economic forecasts as it struggles with economic contraction and heavy austerity measures; symptomatic of a Eurozone that is struggling to get back to sustained growth. This week, alongside expectations the ECB will push interest rates to record lows on Thursday, we also see the release of Europe-wide unemployment and inflation data, economic forecasts from the EU and a raft of data from Germany. Get in touch now for up-to-the-second developments on euro prices.
The US dollar had an extremely poor day on Friday, falling against the majority of its 16 major peers following data showing US gross domestic product increased by less than expected (2.5% compared to the forecast 3.0%), fuelling worries that the US economy is failing to grow in line with expectations. With GDP data falling short of market estimates and inflation remaining low, this has led to some analysts predicting that the Federal Reserve will continue with its stimulus program for longer than has been recently suggested in order to help support the economy. Hints of when the Federal Bank may look to tighten monetary policy may come from the statement that follows the central banks monetary policy decision on Thursday. Manufacturing and non-Manufacturing PMI figures will also be announced this week alongside a raft of unemployment data which includes the highly influential non – farm pay roll data which will be announced on Friday. Speak to one of your traders for the latest news and to get a live quote.
Friday saw the Japanese yen as the stand out performer after the Bank of Japan left monetary policy unchanged. The Australian and New Zealand dollars strengthened for the third consecutive day against a struggling US dollar as a result of market rumours that the major central banks are to start putting money into the higher-yielding South Pacific currencies. The New Zealand Dollar had a particularly strong day as export data came in better than expected. The South African rand fell for the first time in four days, as its central bank announced that increased borrowing and that rising inflation could push bond yields up. It is a busy week for data which sees the release of business confidence data from New Zealand, Chinese Manufacturing PMI, Australian inflation data and building approvals statistics, and from Canada we see GDP data and trade balance figures released. Get in touch for the latest rates.
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Sterling gains on better than expected growth figures | Smart Daily Currency Note
This week (Last week)
GBP/EUR – 1.1860 (GBP/EUR – 1.1712)
GBP/USD – 1.5450 (GBP/USD – 1.5310)
EUR/GBP – 0.8431 (EUR/GBP – 0.8537)
EUR/USD – 1.3024 (EUR/USD – 1.3064)
GBP/AED – 5.6732 (GBP/AED – 5.6221)
GBP/AUD – 1.4890 (GBP/AUD – 1.4792)
GBP/CAD – 1.5745 (GBP/CAD – 1.5678)
GBP/CHF – 1.4582 (GBP/CHF – 1.4256)
GBP/HKD – 11.9920 (GBP/HKD – 11.8828)
GBP/INR – 88.83 (GBP/INR – 82.48)
GBP/JPY – 152.47 (GBP/JPY – 151.38)
GBP/NZD – 1.8115 (GBP/NZD – 1.7965)
GBP/SEK – 10.1994 (GBP/SEK – 9.9762)
GBP/ZAR – 14.0756 (GBP/ZAR – 13.9812)
The main news this week came yesterday as GDP data revealed that the UK had avoided falling into an unprecedented triple-dip-recession after preliminary growth figures for the first quarter exceeded market expectations. After a quiet week for data, the GDP data revealed modest growth of 0.3% when just 0.1% had been anticipated, giving a much-needed psychological boost to consumers, businesses and sterling. The recovery is largely down to a strong performance in a dominant services sector coupled with better North Sea oil and gas output – propelling sterling to rise against all 16 of its major counterparts including reaching one month and two month highs against the euro and US dollar respectively. It has to be remembered that the theme amongst many expert market commentators, just before the Cyprus banking crisis, was that sterling was going to continue in free-fall which highlights the dangers of trying to second guess currency movements. The broader picture of the economy remains largely the same however, whilst these preliminary figures only account for under half of the total data. It is nonetheless an encouraging sign and will no doubt influence the Bank of England’s next meeting on monetary policy on the 8th of May. Be in touch with your trader to see if sterling can find further gains into the weekend.
It has been a fairly poor week for the euro as the market reacted to disappointing data coming out of Germany. Data revealed that the German manufacturing sector had contracted to a greater degree than expected whilst the German Business Climate Index dropped more than economists predicted for a second month in a row. The euro also struggled over continued speculation that the European Central bank will lower interest rates next week amidst concerns of a widely faltering economy. ECB money supply data that is being released this morning could have some bearing on the euro’s performance throughout the day as could on-going speculation regarding the central bank’s interest rate decision and continuing reaction to the UK’s growth data. Call in now for live rates and up to the minute information.
The US dollar fell against both the euro and yen on Thursday after a variable week, as a recent batch of disappointing economic data fuelled concerns about the pace of recovery in the United States. Data released on Wednesday showed that orders for American Durable Goods fell by almost 6% in March, almost twice of what was expected and has led to some analysts suggesting that today’s GDP data may come up short of the median forecasts. Unemployment data released yesterday revealed that the number of people who filed for unemployment assistance in the US fell significantly more than predicted – providing some much needed contrast to the poor labour related data released recently. All eyes will be on today’s advance growth figures this afternoon which are expected to show solid growth of 3.1% – call in now to keep up to date with market reactions.
Elsewhere, commodity backed currencies struggled in the early stages of this week after data from China revealed that the manufacturing sector was slowing down, providing further evidence that their recovery may be faltering. The Japanese yen came close to the key psychological level of 100 against the US dollar this week, though this remained untouched as the currency strengthened early this week. The New Zealand dollar performed well following the news that the Reserve Bank of New Zealand’s left rates unchanged whilst signalling that the central bank was more likely to raise interest rates than cut them. Call in for the latest rates from your dedicated trader.
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Are we in recession? We find out this morning | Smart Daily Currency Note
GBP/EUR – 1.1736
GBP/USD – 1.5312
EUR/GBP – 0.8518
EUR/USD – 1.3038
GBP/AED – 5.5926
GBP/AUD – 1.4855
GBP/CAD – 1.5668
GBP/CHF – 1.4478
GBP/CNY – 9.43
GBP/HKD – 11.8724
GBP/HUF – 353.34
GBP/INR – 82.68
GBP/JPY – 151.92
GBP/NZD – 1.7960
GBP/RUB – 47.86
GBP/SEK – 10.0891
GBP/ZAR – 13.9325
The announcement that the government’s Funding for Lending scheme (the scheme designed to give the economy a boost by encouraging banks to lend to businesses and households) is to be extended lent support to sterling yesterday, trading in a half-a-cent range as everyone looked ahead to today’s preliminary first quarter growth figures. While only preliminary, the UK’s growth figures, are being viewed with great anticipation as they will show whether or not the UK has slipped back into recession. The general consensus is for 0.1% growth, if we see any deviation from this figure expect to see considerable movement. Call in now to find out the verdict and for a live rate.
The euro stuttered as hopes that Italy could at last find a resolution to political instability were offset by disappointing German data that fuelled anticipation of the European Central bank cutting interest rates further in next Thursday’s Monetary Policy committee meeting. The German Business Climate Index dropped more than economists predicted for a second month in a row whilst Italian Retail Sales data indicated a slight contraction. Traders drew some confidence from reports that the formation of a coalition government in the euro zone’s third-largest economy could yet emerge and offer relief to investors buying assets in the region. With speculation rife that the ECB could well cut interest rates in the next central bank meeting, today’s release of Spanish unemployment data could well add more fuel to the fire, so call in today for how this affects euro pricing.
The US dollar has weakened overnight against both the US dollar and the euro. Orders for American Durable Goods fell by almost 6% in March, almost twice of what was expected, whilst Capital Goods Orders – often a barometer for future business investment – grew at a slower pace than analysts had anticipated. With demand for these US products faltering, this data may be seen as highlighting a further slowdown in private sector consumption. First quarter GDP figures are released on Friday and it will be interesting to see if they support a more gloomy outlook for growth in the world’s largest economy going forward. Today, Unemployment Claims data will be the main release, so be in touch with your trader to discuss how this affects the US dollar price throughout the day.
Elsewhere, the New Zealand dollar performed well yesterday following the Reserve Bank of New Zealand’s leaving rates unchanged whilst signalling that the central bank was more likely to raise interest rates than cut them. The Japanese yen fell against the commodity backed currencies as analysts expect the currency to weaken further amid signs that the nation’s investors are seeking foreign assets. The Swiss franc slid for a seventh day against the euro following renewed optimism for Italian political stability whilst the Canadian dollar suffered on the back of data out of the US. Be in touch to see how developments affect your currency pairs.
Sterling steady before Thursday’s growth figures | Smart Daily Currency Note
GBP/EUR – 1.1733
GBP/USD – 1.5241
EUR/GBP – 0.8519
EUR/USD – 1.2995
GBP/AED – 5.5948
GBP/AUD – 1.4886
GBP/CAD – 1.5644
GBP/CHF – 1.4386
GBP/CNY – 9.40
GBP/HKD – 11.8278
GBP/HUF – 351.42
GBP/INR – 82.56
GBP/JPY – 151.64
GBP/NZD – 1.8054
GBP/RUB – 48.16
GBP/SEK – 10.1124
GBP/ZAR – 14.0452
Despite disappointing public sector borrowing figures in the morning, sterling enjoyed a steady day, making gains against most major peers which included strengthening above the 1.17 level against the euro. While today looks set to be quiet in terms of data released, we could nonetheless see volatility as we await tomorrow’s preliminary first quarter growth figures. Although only preliminary, any deviation from the forecast figure of 0.1% growth will likely move the market. Call in now for the latest update on the UK and how this is effecting sterling.
Poor manufacturing data from Germany caused the euro to weaken early yesterday, with the monthly Purchasing Managers’ Index data showing that the German manufacturing sector had contracted to a greater degree than expected. On a more positive note, manufacturing figures from France beat market estimates, but as the powerhouse of Europe, the shortfall in the German figures drove market sentiment. The poor figures emanating from the Eurozone’s largest economy has reinforced speculation that the ECB could cut interest rates to a record low next month, which would cause the currency to weaken further. German Business Climate data released today is likely to have the greatest impact on the performance of the seventeen-nation currency as Eurozone countries continue to hope for more concrete signs of economic recovery. Call in now for live rates and up to the minute information.
The US dollar enjoyed a successful day buoyed by the news that the housing sector is on the up with stronger demand. New home sales figures released yesterday described an upward trend through March, indicating a real estate market recovery could be sustained, and as builders respond to make more homes available, increased demand will help fuel stronger economic growth. Indeed the advance first quarter GDP report on Friday is expected to show the world’s largest economy gathering pace, though figures released today are projected to show that demand for US Durable Goods fell by nearly 3% in March. Talk to your trader to gauge what this could mean for US dollar prices.
Elsewhere, currencies worldwide were affected by data released from China showing a slowing manufacturing sector and providing further evidence that their recovery may be faltering. The Australian and New Zealand dollars fell against most of their major peers following the news, whilst the Canadian dollar traded at a six-week low against its US counterpart despite core retail sales figures exhibiting better than expected results. The Swedish krona also struggled yesterday after the overall unemployment rate was revised upwards. Call in to see how markets react to the Reserve Bank of New Zealand’s central bank decision and Australian inflation figures released overnight.
Sterling – are we seeing the calm before the storm? | Smart Daily Currency Note
GBP/EUR – 1.1672
GBP/USD – 1.5252
EUR/GBP – 0.8566
EUR/USD – 1.3052
GBP/AED – 5.6042
GBP/AUD – 1.4902
GBP/CAD – 1.5672
GBP/CHF – 1.4248
GBP/CNY – 9.42
GBP/HKD – 11.8402
GBP/HUF – 349.22
GBP/INR – 82.56
GBP/JPY – 150.92
GBP/NZD – 1.8226
GBP/RUB – 48.22
GBP/SEK – 9.9670
GBP/ZAR – 14.1124
Sterling had a good day yesterday strengthening against all except one of its 16 major trading partners. This was better than to be expected following the ratings downgrade by Fitch on Friday (from AAA to AA+) due to weak economic performance. The downgrade did not come as a shock although it puts further focus on the GDP data released later this week, with economists largely hopeful that the UK will marginally avoid a triple dip recession. Confidence was further buoyed by news that the Chancellor is likely to extend the Bank of England’s Funding for Lending scheme aimed to boost loans for small businesses and consumers. Today we have a quiet day for GBP data release, with only Public Sector Net Borrowing and CBI Industrial Order Expectations. The critical day this week is Thursday when the growth figures for the first quarter will be released – we should expect increased volatility in the second half of this week. Call now for the latest news.
The euro had a mixed day yesterday as European Central Bank officials gave further indication that interest rates are to remain low, whilst the German Bundesbank articulated their reserved expectations for Eurozone recovery as the region struggles to return to sustained growth. Indeed, the euro may continue to suffer under this gloomy outlook and the ECB’s interest rate decision in ten days’ time could be very significant especially if they decide to cut it. It is hoped that the re-election of Giorgio Napolitano as Italy’s President will reduce Italian political instability but I suspect that there is still a lot of work to be done before a solid base for stability is reached. Today we have the release of the highly influential Manufacturing and Services PMI data for Europe. The current consensus is for an overall contraction in both sectors with only Germany potentially showing industry expansion in the Manufacturing sector. Call in now to see how these figures could affect the rates.
The start of the week saw the release of US housing sector reports, which unexpectedly observed a drop in home sales through March after economist’s estimates that real estate sales would reach their highest levels since 2009 fell distinctly short. Despite this, the US dollar prices were not strongly affected although the US dollar did have a mixed day against major pairings. Further home sales figures will paint a clearer picture later today, though this certainly feels like a soft patch in economic data emanating from America, in contrast to the positive sentiment in the first few months of this year. Talk to your trader today to see whether this marks a turning point in price levels for the US Dollar.
Elsewhere, after the G20 summit offered little criticism of the Bank of Japan’s recent monetary policy reforms recently, the Japanese Yen was well placed to push through to the key 100 mark against the US dollar in early trading yesterday. However, this target level, not seen for four years, remained untouched as the Yen strengthened through the day. There is a belief that once we breach this level we will see a further rapid depreciation in the Yen. The Swedish krona gained against most major peers on the news that the deputy governor of its central bank will resign in May after failing to garner support for further interest rate cuts. Today sees the release of key retail figures from Canada before Bank of Canada Governor Mark Carney speaks this afternoon in the wake of Canadian dollar trading at 6-week lows following poor US home sales figures. Get in touch for the latest news and up to the second rates on your currency pair.
Sterling under pressure | Smart Daily Currency Note
GBP/EUR – 1.1652
GBP/USD – 1.5220
EUR/GBP – 0.8580
EUR/USD – 1.3042
GBP/AED – 5.5892
GBP/AUD – 1.4808
GBP/CAD – 1.5612
GBP/CHF – 1.4214
GBP/CNY – 9.40
GBP/HKD – 11.8121
GBP/HUF – 348.09
GBP/INR – 82.16
GBP/JPY – 151.84
GBP/NZD – 1.8042
GBP/RUB – 48.04
GBP/SEK – 9.9152
GBP/ZAR – 14.0652
It just shows how things can change so quickly. After a steady week sterling lost over a cent against the euro and the US dollar late Friday as it was announced that Fitch joined Moody’s downgraded UK government debt in stripping the UK of AAA status based on the weak economic environment. Further rapid movements can be expected this week as we await Thursdays announcement of UK growth figures for the first quarter of this year. The median forecast is for slight growth of 0.1% – narrowly avoiding the ominous triple-dip recession; however, the overall consensus is far from clear and analysts remain split as to whether or not the UK will officially fall back into recession. Any deviation from the 0.1% increase will undoubtedly affect sterling’s value. Call in now for the latest news and an up to the second quote.
The euro advanced against sterling on Friday amid speculation that the European Central Bank will take additional measures to support the monetary union, though buoyant attitudes seem perpetually diluted by the prospect of economic and political instability in the medium-term. As commercial banks in the Eurozone look to repay almost eleven billion Euros of the Long-Term Refinancing Operation this week, the weak forecast for private sector lending may encourage the ECB to drop interest rates to record lows amid another quantitative easing cycle as growth and inflation prospects remain depressed. Ahead of the ECB rate decision on 2nd May we should see more fluctuation in the euro’s fortunes as officials maintain a reactionary approach to addressing risks inherent in the region. Manufacturing and Services PMI data released this week will be watched closely as key indicators of how well the Eurozone is performing as a whole. Call in now for the latest update on the markets.
The US dollar held a fairly constant trajectory just before the weekend, whilst seeing significant gains against sterling. There are a number of interesting pieces of data coming out of the US this week. Today and tomorrow we will see the release of home sales data, a leading indicator of economic health, the outcome of which will be reflected in the market. Later on in the week we have durable goods, unemployment, and GDP data released on Wednesday, Thursday and Friday respectively. All data will be influential on the market so call in now for up-to-the-minute rates.
Elsewhere, the Japanese yen weakened over the weekend – nearing the 100 per dollar level not seen since 2009 after the Bank of Japan’s monetary policy stimulus policies went unopposed throughout the G20 meetings. Japan’s currency dropped in most of its major pairs, with traders expecting further decreases in value against the US dollar and euro. The South pacific nations’ currencies rebounded from weekly losses however as monetary stimulus from the US to Japan increased demand for higher-yielding assets, with the Australian and New Zealand dollars both finding demand following the recent drop in gold prices. Central bank and inflation figures this week from both regions will be pivotal for how they are set to perform in the second quarter. Call in now for live rates and an update on the latest global developments.
Concerns over UK growth could undermine sterling next week | Smart Daily Currency Note
This week (Last week)
GBP/EUR – 1.1712 (GBP/EUR – 1.1738)
GBP/USD – 1.5310 (GBP/USD – 1.5378)
EUR/GBP – 0.8537 (EUR/GBP – 0.8516)
EUR/USD – 1.3064 (EUR/USD – 1.3088)
GBP/AED – 5.6221 (GBP/AED – 5.6452)
GBP/AUD – 1.4792 (GBP/AUD – 1.4572)
GBP/CAD – 1.5678 (GBP/CAD – 1.5536)
GBP/CHF – 1.4256 (GBP/CHF – 1.4316)
GBP/HKD – 11.8828 (GBP/HKD – 11.9184)
GBP/INR – 82.48 (GBP/INR – 83.62)
GBP/JPY – 151.38 (GBP/JPY – 152.78)
GBP/NZD – 1.7965 (GBP/NZD – 1.7838)
GBP/SEK – 9.9762 (GBP/SEK – 9.7532)
GBP/ZAR – 13.9812 (GBP/ZAR – 13.7124)
Sterling has had a “steady” week. It lost a bit of ground against the US dollar, held its own against the euro and gained against the commodity backed currencies. During the week there were some ups and downs as data was released but we did appear to be in a period of relative calm for sterling especially when compared to the first three months of this year. However this could all change next week with the release of first quarter GDP figures. Will the UK economy be subject to a triple dip recession? The Bank of England monetary policy meeting minutes revealed no change in the number of members voting for an increase in quantitative easing although analysts are predicting that when the new Governor takes up his post at the Bank of England in July, it will herald a fresh cycle of quantitative easing which is likely to undermine the currency further. During the week sterling did slip against the euro to a six-week low and looked susceptible to further weakness in light of continuing concerns about the British economy and following comments from the IMF who suggested it may be time for the UK to consider altering its current fiscal plans. Sterling lost ground against the US dollar as data released showed UK unemployment rates climbing while wage increases were lower than the level of inflation. Inflation data showed that headline inflation of 2.8% remained above the Bank of England’s target of 2.0%. Further negativity came yesterday as poor UK retail sales figures were released. We have a quiet day today in terms of sterling data but the IMF and G20 meetings taking place could well lead to a volatile market. Call now for the latest news and updates.
The recently mercurial euro started strongly this week before fears were raised that interest rates could be cut to record lows in the short to medium term. News that Cyprus is to sell off a chunk of its gold reserves also didn’t help. However in mid-week it reached a six-week high against both the sterling and the US dollar, showing a broad firmness having been boosted by central bank demand and ground made against the Japanese yen. This however precluded its biggest daily drop in ten months as fears that interest rates could be cut to record lows began to materialise. Nonetheless the single currency found strong support yesterday at the psychologically important $1.30 level but remains vulnerable to political risks such as Italy failing to bring presidential elections to a conclusion and continued uncertainty over a bailout deal for Cyprus. Today sees German inflation figures released as well as a Eurozone current account report which will shed light on prevailing demand for the currency. Europe will also be thrust into focus with G20 meetings concluding over the weekend: call in now for how decisions could impact your euro price levels.
It has been a varied and eventful week for the US dollar as it responded to a mixed release of data. The currency performed poorly during the middle of the week in response to a falling US Consumer Price Index and relatively restrained inflation data coming out despite the 2.5 trillion dollars of quantitative easing that has been pumped into the US economy over the last 5 years. Whilst there was further fluctuation in both directions towards the end of the week after the Beige book indicated continued economic recovery, the US dollar ended up at back around the 1.53 mark against sterling and looked to be weakening towards 1.31 against the euro. A speech by the Governor of the Federal Reserve today could have an impact on performance throughout the day as could on-going developments in the G20 meetings. Call in now for live rates and up to date information.
Elsewhere, the Japanese yen rose on Monday for the first time in two weeks as people looked to a safe haven following lower than expected economic growth from China. There was also a slow performance from Australian and Canadian dollars, as well as all commodity backed currencies as metal prices suffered their steepest drop in a year with gold and crude oil prices especially suffering. The Swedish krona struggled midweek after its central bank revised down its path for future interest rates. The Canadian dollar continuing a prevailing slide to its lowest level in a month against the dollar after the Bank of Canada downgraded its growth predictions. How the currency reacts to today’s Consumer Price Index figures and sale statistics data will be pivotal.
Euro strength surprises | Smart Daily Currency Note
GBP/EUR – 1.1638
GBP/USD – 1.5334
EUR/GBP – 0.8591
EUR/USD – 1.3164
GBP/AED – 5.6322
GBP/AUD – 1.4796
GBP/CAD – 1.5690
GBP/CHF – 1.4152
GBP/CNY – 9.47
GBP/HKD – 11.9018
GBP/HUF – 341.72
GBP/INR – 82.53
GBP/JPY – 150.94
GBP/NZD – 1.8092
GBP/RUB – 47.85
GBP/SEK – 9.7642
GBP/ZAR – 13.9824
Sterling yesterday lost ground against the euro but held its own against the US dollar. CPI data showed that headline inflation of 2.8% remained above the Bank of England’s target of 2.0%. Sterling dropped to a six-week low against the euro and looked susceptible to further weakness in light of continuing concerns about the British economy. An official from the IMF suggested it may be time for the UK to consider altering its current fiscal plans in light of very weak private demand. Inflation levels may weigh on growth and it remains difficult to predict whether GDP figures next week will identify a triple-dip recession. The minutes from the latest Bank of England monetary policy meeting released today will be closely watched; if we see another member of the Monetary Policy Committee voting on further quantitative easing this will have a palpable and negative effect on sterling prices, so call in for market reaction and the latest rates.
In spite of disappointing German economic sentiment reports released early in the morning, the euro was one of the best performing currencies yesterday reaching a one and a half month high against sterling and the US dollar where it challenged the key 1.32 resistance level. The seventeen-nation currency showed a broad firmness against most of its major peers; boosted by central bank demand as well as high gains made against the Japanese Yen as it recovered from weakening on Monday. Italian Trade Balance data which was much better than expected helped support the euro whilst consumer price index figures revealed annual inflation went down to 1.7% in March. The Eurozone economic calendar is fairly thin today with only the German 10-year bond auction of note. However, as traders start to ponder if Slovenia will be next Cyprus, Italian lawmakers vote to elect a new president on Thursday and problems surrounding Portugal come to light – there is always the potential for news to impact euro strength. Get in touch for the latest rates.
The US dollar had a very poor day yesterday, weakening against all its major counterparts bar the Japanese yen as building permits data and head line inflation figures both fell short of market estimations. The US Consumer Price index fell to 0.1% yesterday lower than some expectations and inflation is being contained despite more than 2.5 trillion dollars of quantitative easing being injected into the economy over the last five years. This news came as gold prices recovered to some degree having slipped drastically through the morning. Today ‘s main releases will be the Beige book this evening which will reveal the state of the local economies from all 12 Federal Reserve Banks. Despite it being a quiet day on the data front, two members of the Federal Open Market Committee will be speaking today so there is the potential for volatility in the market. Call in now for the latest update on the US dollar.
Elsewhere, the Japanese yen was the worst performing currency yesterday weakening significantly against its major counterparty on Tuesday in light of the central bank’s announcement of unprecedented stimulus measures. The South African Rand strengthened for the first time in three days, bouncing back from its sharpest slip in months as metal prices rallied and investors sensed the currency’s decline had bottomed out. The Canadian dollar recovered against its US counterpart following Mondays drop showing the largest fall in a year as gold losses dampened demand for commodity-linked currencies. The main news today will be the Bank of Canada’s interest rate decision which is widely expected to be kept on hold at 1%, furthermore, the monetary policy report that goes alongside this release will be watched closely by investors. Be in touch for movement in your currency at Smart now.
Sterling holds steady ahead of busy week | Smart Daily Currency Note
GBP/EUR – 1.1696
GBP/USD – 1.5298
EUR/GBP – 0.8543
EUR/USD – 1.3064
GBP/AED – 5.6142
GBP/AUD – 1.4745
GBP/CAD – 1.5642
GBP/CHF – 1.4225
GBP/CNY – 9.45
GBP/HKD – 11.8618
GBP/HUF – 344.62
GBP/INR – 83.07
GBP/JPY – 149.32
GBP/NZD – 1.8042
GBP/RUB – 48.06
GBP/SEK – 9.7806
GBP/ZAR – 13.9594
Sterling had a day steady day yesterday as traders are nervous ahead of the UKs busy week of data releases and as the commodity market stole the headlines with Gold and Silver prices dropping by nearly 10% and 13% respectively. The markets are also having to digest figures from China showing that growth has unexpectedly slowed. It will be interesting to see if this week’s data releases backup the belief that, at last, there is a sustainable but somewhat lethargic economic recovery in Britain. This morning’s inflation release is expected to show inflation at 2.8%, so get in touch with your trader for market reactions.
The euro initially struggled yesterday against the US dollar, sterling and Japanese yen. Indeed, news that Cyprus looks likely to sell €400 million worth of its gold reserves was testament to a feeling of structural weakness across outlying member states as fears of Cyprus leaving the single currency were talked down. The decision is necessary in order to raise the €7 billion contribution that Cyprus must put forward in order to obtain the planned EU bailout, and is likely to underscore willingness by many central bank officials to ease monetary policy in the medium term. Today will see the monthly release of the European economic sentiment survey’s along with Core Consumer Price Index inflation figures. The survey is likely to have a direct impact on the value of the euro this week so get in touch for the latest rates.
The US dollar fluctuated throughout yesterday against most of its main counterparts. Both important data releases for the day were received with a degree of disappointment; firstly the New York Manufacturing Index showing conditions are improving at a much slower pace than predicted. Alongside this, figures on international demand for U.S. financial assets revealed a stark drop as investors sought shelter elsewhere throughout February although this was forecast to bounce back through the Spring. Today brings a brace of noteworthy events for the US dollar starting with the Residential Building Permits report followed by a Consumer Price Index release, though levels on both fronts are expected to remain constant. Call in today for the latest updates on the market situation and live price from our traders.
Yesterday saw the Japanese yen climb for the first time in two weeks, emerging as a safe haven asset following news that Chinese economic growth came in at 7.7%, below forecasts of 8%. The commodity backed currencies all struggled yesterday including the Canadian dollar dropping to the lowest point against sterling since February. Overnight, we saw the meeting minutes from this month’s Australian monetary policy committee meeting released and later on today we will see manufacturing sales figures from Canada and key inflation data being released in New Zealand. Be in touch for how world currencies react in the wake of a potentially slowing Chinese economy with your trader.