Sterling continues to fall | Smart Daily Currency Note
(Last week) This week
(GBP/EUR – 1.1719) GBP/EUR – 1.1687
(GBP/USD – 1.5511) GBP/USD – 1.5253
(EUR/GBP – 0.853) EUR/GBP – 0.8552
(EUR/USD – 1.3234) EUR/USD – 1.3047
(GBP/AED – 5.6965) GBP/AED – 5.6022
(GBP/AUD – 1.6778) GBP/AUD – 1.6473
(GBP/CAD – 1.6083) GBP/CAD – 1.5967
(GBP/CHF – 1.4375) GBP/CHF – 1.4432
(GBP/HKD – 12.0283) GBP/HKD – 11.8291
(GBP/INR – 91.788) GBP/INR – 91.079
(GBP/JPY – 151.60) GBP/JPY – 150.94
(GBP/NZD – 1.9906) GBP/NZD – 1.9534
(GBP/SEK – 10.1741) GBP/SEK – 10.242
(GBP/ZAR – 15.810) GBP/ZAR – 15.156
On the whole a disappointing week for sterling – strong retail sales figures early in the week were encouraging signs for the British economy, giving sterling a short boost, but it has slipped away since. Key to driving this decline was two further members of the monetary policy committee calling for a looser monetary policy to stimulate growth in the country. Yesterday, the Office for national statistics revised their figures from last year to say that growth was substantially lower than previously thought, but, Britain did not see the two consecutive quarters of negative growth which would indicate a double dip recession. The focus for the next few days is undoubtedly going to be Mark Carney’s entrance as new Governor of the Bank of England. While he has made it clear that there is no panacea for British economic woes, great expectations rest on his shoulders. Call your trader today for the latest news and rates for the UK and sterling.
The euro struggled this week, following comments from the President of the European Central Bank President who said that the economic outlook still warrants an accommodative monetary policy stance. Notably, the euro bought less than 1.30 US dollars for the first time in a month on Wednesday. The European economic summit kicked off yesterday, with ministers from across the Eurozone attempting to come to a conclusion on a banking union. Positive unemployment figures from Germany lent some support to a struggling euro yesterday putting a halt to the downward trend, but the overall picture is still not strong for the 17-member state currency. Get in touch today for the latest on the euro.
The US dollar has enjoyed a very strong week – reaching 1.30 against the euro and 1.52 against sterling at its peak. The Chairman of the Federal Open Market Committee kick started the trend with the announcement last Friday that stimulus programs will be tapered out. Positive data from the States helped the US dollar to strengthen further still, indicating a healthy recovering economy. This trend of dollar strength continued in spite of GDP figures being revised down from initial expectations showing growth was only at 1.8%, a long way shy of the 2.4% that had initially been anticipated. Speak to your trader for up to the second rates, and the latest market news.
Elsewhere, as Kevin Rudd returned for a second stint as Prime Minister of Australia following a party leadership ballot, the Australian dollar enjoyed the most positive week it has in some time. The Norwegian krone fell almost 2 percent against sterling as markets continued to react to last week’s surprise cut in interest rates, with its Swedish counterpart being hit hard too though seeing some recovery through the week. The Indian rupee continued to free-fall, moving to new all-time lows. GDP data released from Canada this afternoon is expected to show the economy only grew by 0.1%; any variation away from this could spark a big reaction in the market. Call your trader for rates and news for your currency.
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The US dollar continues to strengthen | Smart Daily Currency Note
GBP/EUR – 1.1757
GBP/USD – 1.5328
EUR/GBP – 0.8503
EUR/USD – 1.3035
GBP/AED – 5.6303
GBP/AUD – 1.6455
GBP/CAD – 1.5995
GBP/CHF – 1.4445
GBP/CNY – 9.4256
GBP/HKD – 11.8906
GBP/HUF – 347.25
GBP/INR – 92.265
GBP/JPY – 150.5
GBP/NZD – 1.958
GBP/RUB – 50.36
GBP/SEK – 10.3165
GBP/THB – 47.743
GBP/ZAR – 15.428
Sterling had a poor day yesterday, losing considerable ground to the US dollar, and only just holding its own against a weak euro. The drop came as one of the members of the monetary policy committee called for a looser monetary policy to stimulate the economy. Current account figures (the difference in value between imports and exports) are released today and may well lead to another eventful day’s trading for sterling. The other key release will be the final reading of the UK’s GDP from last quarter, currently expected to confirm that we saw mild growth of 0.3%, any significant variation away from this figure and we could see a big market reaction. Call in now for the latest news and up to the second rates for sterling.
The euro continued to struggle yesterday, falling to three week lows against the US dollar and breaking through the 1.30 level, as two further members of the European Central Bank (ECB) reiterated President Draghi’s comments that monetary policy would remain accommodative for as long as necessary. Today is quiet for major releases as the EU economic summit commences with the European banking union back on the agenda. Call your trader now for the latest update from the market.
The US dollar enjoyed a very strong day, adding to Tuesday’s gains. This move came in spite of the final GDP reading coming out much worse than expected showing growth was only at 1.8%, a long way shy of the 2.4% that had initially been anticipated, whilst 1st quarter growth figures were revised down to 1.8%. This caused the dollar to weaken off initially before continuing to strengthen late on with the US dollar challenging the 1.53 resistance level against sterling and breaking through the 1.30 mark against the euro. Employment figures released this afternoon will be the main talking point for dollar traders, as well as comments from two members of the Federal Open Market Committee. Call your trader today for up to the second rates.
Elsewhere, as Kevin Rudd defeated Julia Gillard in a party leadership ballot to become Prime Minister, the Australian dollar gained a cent against sterling to reach week highs. The Indian Rupee weakened to new all-time lows – breaking through the 93.0 mark against sterling as the currency continues its free-fall. The Japanese yen held its own, after recent demand for the safe haven currency began to cool. Overnight we saw the release of Trade balance data and business confidence figures from New Zealand, but little else is scheduled to be released today. Get in touch with your trader today for the latest for your currency.
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
Sterling makes steady gains against the euro | Smart Daily Currency Note
GBP/EUR – 1.1794
GBP/USD – 1.5432
EUR/GBP – 0.8471
EUR/USD – 1.3074
GBP/AED – 5.6683
GBP/AUD – 1.6621
GBP/CAD – 1.6182
GBP/CHF – 1.4468
GBP/CNY – 9.4873
GBP/HKD – 11.9711
GBP/HUF – 350.34
GBP/INR – 92.351
GBP/JPY – 150.33
GBP/NZD – 1.9893
GBP/RUB – 50.7233
GBP/SEK – 10.366
GBP/THB – 47.907
GBP/ZAR – 15.506
Sterling drifted through yesterday without making many waves and gaining slightly against the euro. This was despite the market starting to develop nerves as to the impact that the new Bank of England Governor Mark Carney may have when he starts on Monday. Modest gains in mortgage approvals indicate a recovering property market, matched by realised sales figures, perhaps Mr Carney is taking the reins of a horse that is finally gathering some speed. The incumbent Governor Mervyn King speaks this morning on economic stability, a speech which looks likely to be largely a hand over speech. We can generally expect volatility while he is speaking as traders listen for hints as to future monetary policy. Call your trader now for up to the second rates.
The euro struggled yesterday losing almost a cent to a buoyant US dollar, and half a cent to sterling, as ECB President Draghi said that the economic outlook still warrants an accommodative monetary policy stance. First thing this morning we have seen the release of consumer confidence data from Germany, but, with little data released from the rest of Europe today, the question is where the downward trend stops. If rates nudge through the 1.18 mark against sterling, we could see further gains for sterling, but that level hasn’t been broken in 2 months so the chances are limited. A meeting between the Finance Ministers of the EU member states commences today and so any significant news emanating from these meetings could cause a notable reaction in the market. Call your trader today for the latest news and live prices.
The US dollar climbed yesterday as three key sets of data exceeded expectations. Core Durable Goods orders, not expected to rise, added 0.7% to last month’s release. Consumer confidence, and New Home sales compounded the effect later in the afternoon adding support to a rising dollar and a recovering American economy. Positive fundamentals from the States are likely to have an exaggerated effect on currency values in light of the Federal Reserve’s recent taper talk – a strengthening economy suggesting that a winding up of quantitative easing is close. Today is far quieter, the only major release being quarterly GDP figures. The preliminary figures were released a month ago meaning any effect will likely have already been seen – though any deviation from the 2.4% growth would shock markets. Call your trader to find out where the US dollar is trading now.
Elsewhere, the Japanese yen strengthened yesterday rebounding from two-week lows against the US dollar. Yen strength was a reflection of underlying nervousness in the global market, as concerns over a shortening supply of liquidity in China and the US raise demands in the short term for the relatively safe Japanese currency. The Canadian dollar had another tough day, although marginally better than we have seen over the last five days or so. The weakness yesterday was a response to strong data coming out of the US fuelling rumours that Canada’s largest trading partner will slow monetary stimulus. The Australian dollar held ground against its main trading partners, hovering tentatively above 33-month lows against its US counterpart. The growing consensus is that the Aussie dollar will remain relatively low for the foreseeable future. The most notable piece of data released today is the monthly trade balance figures coming out of New Zealand. Call in for latest news and rates for your currency.
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Sterling stronger against the euro | Smart Daily Currency Note
GBP/EUR – 1.1758
GBP/USD – 1.5461
EUR/GBP – 0.8502
EUR/USD – 1.3147
GBP/AED – 5.6773
GBP/AUD – 1.6706
GBP/CAD – 1.6212
GBP/CHF – 1.4404
GBP/CNY – 9.4992
GBP/HKD – 11.9902
GBP/HUF – 348.7
GBP/INR – 92.234
GBP/JPY – 150.65
GBP/NZD – 1.9953
GBP/RUB – 50.4827
GBP/SEK – 10.3878
GBP/THB – 47.84
GBP/ZAR – 15.4166
Sterling had a good day yesterday even though there was an absence of data released across the global markets. With strong retail sales figures last week there are encouraging signs for the British economy and sterling recovered from session lows to stem the its decline against the US dollar. Mortgage approval data today will shed some light on demand in the housing sector whilst Bank of England officials testifying on inflation could affect the markets early on. Moreover, with revised first quarter growth figures due on Thursday sterling prices could experience increased volatility as the week goes on, especially if there is a big revision from the original estimate . Call in now for the latest updates.
The euro was fairly flat yesterday, with no movement either way against the US dollar, and losing half a cent to a better performing sterling as a survey of Business Climate in Germany underwhelmed the markets. Today is even quieter on the news front than yesterday, but we can still expect to see volatility as the euro remains susceptible to releases from around the world. Increasing concerns that Germany – Europe’s powerhouse – is struggling to return to a state of growth will affect the euro’s relative price as the week progresses due to the substantial amount of key data released throughout the remainder of the week. Call in today for the latest news and rates for the euro.
It was a relatively weak day for the US dollar yesterday, losing ground to sterling and failing to make any gains against the euro. In contrast to yesterday’s slow news flow, today sees a number of key releases. At present, forecasts suggest that consumer confidence may have tailed off since last month, core durable goods orders are expected to have slipped slightly, but, new home sales are set to have increased. With all three releases coming in the early afternoon US time, we can expect volatility but which way the dollar is likely to trend is less certain. It would seem that a dramatic move is only likely if either of the sets of figures surprise, though the main driver in the market still surrounds the Federal Reserve’s potential to tighten monetary policy. Call your trader today to find out how the dollar has been moving.
Elsewhere, the Canadian dollar continued to struggle in the wake of the US Federal Reserve’s announcement last week that it will end monetary stimulus. The Canadian dollar declined against the majority of its 16 major trading partners yesterday; approaching a two-year low against its US counterpart. Both Scandinavian krone struggled, carrying over a difficult end to last week. The Norwegian krone fell almost 2 percent against sterling as markets continued to react to last week’s surprise cut in interest rates, with its Swedish counterpart being hit hard too. Today is fairly a fairly quiet day data-wise, though we can expect volatility around lunch time as the Swiss National Bank governor speaks. Markets will doubtless react to any hints as to future economic policy. Get in touch for up to the second rates and news for your currency.
Lots of data, will sterling hold its own? | Smart Daily Currency Note
GBP/EUR – 1.1718
GBP/USD – 1.5365
EUR/GBP – 0.8529
EUR/USD – 1.3114
GBP/AED – 5.643
GBP/AUD – 1.672
GBP/CAD – 1.6134
GBP/CHF – 1.4358
GBP/CNY – 9.4317
GBP/HKD – 11.9157
GBP/HUF – 351.2
GBP/INR – 91.683
GBP/JPY – 151.09
GBP/NZD – 1.9851
GBP/RUB – 50.5418
GBP/SEK – 10.2881
GBP/THB – 47.701
GBP/ZAR – 15.74
Sterling, though losing ground against a buoyant dollar, performed well against the euro following the news that the UK public sector net borrowing rose at a slower rate than anticipated in the last quarter. The National Statistics Office reported that borrowing rose to 10.5 billion pounds rather than the expected 13.8 billion pounds. The UK currency is performing steadily against its euro counterpart as core macro-economic data, such as last week’s robust Retail Sales and the improving housing market, support sterling. This has cooled speculation that Mark Carney will preside over more quantitative easing or interest rate cuts when he takes over the helm at the Bank of England next month though residual concerns do remain that his historically accommodative attitude to monetary policy could manifest itself should UK data worsen. Indeed, the disappointing Confederation of British Industry survey last week is a reminder that the recovery in this country is not completely assured and eyes will be on Wednesday’s inflation report hearing as well as the current account figures and final GDP reading on Thursday as we move towards the end of the month. Be in touch throughout for the latest developments.
The euro felt the effects of a resurgent US dollar strength on Friday as the rate dropped by over a cent during the day. Whilst data concerning the difference between the value of imports and exports came out favourably for the euro, this did little, if anything, to prevent a significant slide. With regards to influential releases this week, this morning we have business climate data from Germany and later on this week we will have more data from Germany including the change in unemployment and retail sales figures. As always, traders will pay special attention to data emanating from Germany due to its position as Europe’s biggest economy. The main other event this week will be the EU Economic Summit where the focus will be on economic policy and the completion of the EU’s economic and monetary union. Call in throughout the week for the latest rates and developments in euro value.
The US dollar strengthened further on Friday pushing down to the 1.31 mark against the euro. Markets had surged following the announcement of a plan to bring stimulus to an end. It is another busy week for data in the US with Core Durable Goods Orders, Consumer Confidence and New Home Sales all due for release on Tuesday. Other key releases will be the final GDP reading which is expected to show the economy grew at a rate of 2.4% and on Thursday there will be the weekly release of unemployment claims alongside data showing the number or homes pending sale. Several members of the Federal Open Market Committee will also be speaking this week and it will be interesting to see what they say following last weeks comments from the Chairman of the Federal Reserve where he stated that he expected to start reducing the quantitative easing programme later this year and hopefully end it by the middle of next year. Stay in touch throughout the week with Smart.
Elsewhere, the Norwegian krone slid downwards for a fifth day against the US dollar, marking a week of decline not seen for over 20 years. For the first time since 2010, the Norwegian krone weakened past the 8 per euro mark following the Norwegian central bank’s predictions that benchmark interest rates could be lowered this year. Sweden’s krona meanwhile slipped the furthest in 2 months and the Canadian dollar dropped to near 2-year lows after the country’s May inflation rates grew slower than expected and retail sales figures disappointed. It is a busy week on the data front with Trade Balance and Business Confidence figures from New Zealand; a slew of Japanese data including inflation statistics, industrial production and retail sales data, whilst we have all important GDP data from Canada which is expected to show there has been no growth what so ever. Be in touch with your trader throughout the week for information and prices from your currency pair.
Difficult week for sterling especially against the dollar | Smart Daily Currency Note
(Last week) This week
(GBP/EUR – 1.1761) GBP/EUR – 1.1719
(GBP/USD – 1.5689) GBP/USD – 1.5511
(EUR/GBP – 0.8497) EUR/GBP – 0.853
(EUR/USD – 1.3337) EUR/USD – 1.3234
(GBP/AED – 5.7623) GBP/AED – 5.6965
(GBP/AUD – 1.6328) GBP/AUD – 1.6778
(GBP/CAD – 1.5962) GBP/CAD – 1.6083
(GBP/CHF – 1.4484) GBP/CHF – 1.4375
(GBP/HKD – 12.1792) GBP/HKD – 12.0283
(GBP/INR – 90.601) GBP/INR – 91.788
(GBP/JPY – 148.73) GBP/JPY – 151.60
(GBP/NZD – 1.9452) GBP/NZD – 1.9906
(GBP/SEK – 10.1781) GBP/SEK – 10.1741
(GBP/ZAR – 15.503) GBP/ZAR – 15.810
A difficult week for sterling especially against the US dollar and to a lesser extent against the euro. This contrasted with sterling gaining ground when compared to the commodity backed currencies. Thursday saw the release of better than expected retail sales data which gave some support to sterling yesterday, helping the UK currency to stabilise after Wednesday’s losses. Sterling traded within a relatively narrow range against a surging US dollar whilst posting modest gains against the euro. However, it remains to be seen if sterling will be able to hold its ground against the dollar as the Monetary Policy Committee’s uncertainty is now in stark contrast to the Federal Reserve’s newly assertive attitude towards quantitative easing strategy. The only UK news with the potential to directly affect sterling performance today is the release of public sector net borrowing data, which will show the difference between income and expenditure in the public sector during the month of May. Call in now to see how sterling prices react to continuing dollar strength ahead of Mark Carney taking over as the Governor of the Bank of England next month.
The single currency has performed well for much of the week, but after rising to a four month high against the US dollar the euro lost ground in many pairings following poor German manufacturing sector data. Though many areas of the report outperformed (and despite better service sector figures and evidence of slower decline in new business) the composite output index still described manufacturing activity shrinking overall. French manufacturing results similarly showed a contraction though not to the extent many had anticipated, with the euro losing around half a cent against sterling. With only news on the European current account balance today there is going to be increasing pressure on Mario Draghi and the European Central Bank to find innovative ways of stimulating the economy. The question is, what can turn the tide and get the euro back on an upward trend. Call your trader today for the latest news and the best live prices on your euro trades.
The US dollar had a good week in the wake of the Federal Reserve’s news that it plans to taper back its quantitative easing initiative. Volatility in currency markets as a result were at the highest levels in a year as the US currency forged ahead against its most traded counterparts. This performance is set to continue as long as the world’s largest economy keeps improving – especially in regard to employment figures. Despite news that jobless claims had in fact increased last week, better than forecast factory activity and home sales figures increasing over 4% helped extend dollar value, with the reserve currency also being bolstered by investors selling off interest in other currency markets seeking a safe haven. What needs to be noted though is that the US dollar is only back to the level it was against sterling two weeks ago. In the interim there has been a two cent up and down movement but this seems to point to a correction rather than a full blown collapse for sterling. Call your trader with any US dollar currency requirements to discuss how to maximise your potential in this market.
Elsewhere, US dollar strength weighed heavily on world currency markets. India’s rupee fell by 1.5% against the US dollar – a record low. Similarly, due to the on-going political turmoil in the region, Turkey’s lira was at an all-time low against its American counterpart on Thursday whilst the Polish zloty dropped by 2%. The Australian dollar continued its slide, falling for a fifth day, exacerbated by the Chinese purchase Managers Index for the manufacturing sector posting lower than expected results. The relationship between Chinese economic growth and Australian currency strength remains close, and price levels are likely to keep sliding along with interest rate levels as long as expansion in the Chinese economy continues to decelerate. The Bank of Japan Governor speaks this morning whilst Canadian inflation and retail sales data are certain to impact Canadian dollar prices heavily. Keep up-to-date by calling Smart today.
Sterling suffers as the US recovers | Smart Daily Currency Note
GBP/EUR – 1.166
GBP/USD – 1.5444
EUR/GBP – 0.8574
EUR/USD – 1.3245
GBP/AED – 5.6731
GBP/AUD – 1.6738
GBP/CAD – 1.5922
GBP/CHF – 1.4377
GBP/CNY – 9.4631
GBP/HKD – 11.9796
GBP/HUF – 348.61
GBP/INR – 92.452
GBP/JPY – 150.64
GBP/NZD – 1.968
GBP/RUB – 50.56
GBP/SEK – 9.9917
GBP/THB – 47.915
GBP/ZAR – 15.821
America sneezes and the UK catches a cold. The Federal Reserve laid out it’s time plan for reducing and ending its programme of quantitative easing last night and sterling quickly lost ground against both the US dollar and the euro. Not a surprise against the US dollar as any programme of quantitative easing should always weaken a currency as international investors look for constant yields, so the ending of it should strengthen a currency. However it is surprise to see the euro strengthen at the same time. Perhaps its uncertainty about what the UK is likely to do with its programme of quantitative easing as yesterday saw the publication of minutes from June’s Bank of England monetary policy committee meeting which again revealed that three members had voted for additional monetary stimulus. Outgoing Governor Mervyn King as well as two other policymakers voted in favour of increasing the size of the asset purchase facility by a further 25 billion pounds, whilst six voted in favour of keeping it steady. The vote on interest rates was unanimous in holding levels at a record low of 0.5%. Matters could be different however in next month’s meeting when Mark Carney takes over at the Bank of England. Previously a staunch advocate of loose monetary policy, many are still unsure whether he will follow his predecessor in looking to augment the money supply. Look out for retail sales data today affecting price levels by talking to your trader.
Yesterday was a quiet day for the euro with the single currency seeing little movement against both its sterling and US dollar counterparts until the Federal Reserve announcement towards the end of the day. We can expect further volatility today as traders react to both Services and Manufacturing Purchase Manager’s Index data from France and Germany due to be released this morning. Germany has started to show more sustained strength across different sectors, though more bad news emanating from the French economy is likely to further permeate through to the political and social unease among the population. Much attention will be on today’s Eurogroup meetings, with a cohesive strategy for ending the recession across the region still thus far proving elusive. Quantitative easing policy will again have a strong impact on currency markets, though the European Central Bank has expressed its willingness to adopt any method necessary to stimulate growth. Call in now to see how these events affect euro performance and for a live quote on your trading requirements.
The US dollar consolidated throughout much of Wednesday ahead of last night’s highly anticipated Federal Open Market Committee policy statement. Once made the dollar strengthened across the board as the Chairman of the Federal Reserve stated that they expected to start reducing the programme later this year and hopefully end it by the middle of next year. They also expected interest rates to start rising on 2015. The preface to all this is improving economic conditions in the US and reduced unemployment which is far from certain given the reduction in government expenditure and increase in taxes made earlier this year. Speculation regarding quantitative easing has been fuelling price fluctuation in all markets related to the dollar for months, and we are likely to see more movement throughout the day as markets adjust to Ben Bernanke’s more detailed assertions regarding monetary policy going forward. Data released today will include the US home sales and manufacturing index figures. Call Smart today for the latest developments.
Elsewhere, The Australian dollar failed to rebound from recent losses yesterday following a three day slide. With commodity prices continuing to fall, there would seem to be little hope of a recovery for the economy or price levels in the near future with the currency being one of the worst performing this year. Things were better for Australia’s antipodean cousin as the New Zealand dollar made gains in the wake of whole milk powder (one of the country’s biggest exports) rising in value for the first time in 2 months alongside a narrowing of the nation’s current account deficit. Today the Swiss National bank hold a press conference on interest rates and monetary policy: while no change in rates is expected, expect volatile market conditions over the course of the conference. Call your trader today for the latest news and rates for your currency.
Sterling slips badly as inflation disappoints | Smart Daily Currency Note
GBP/EUR – 1.1685
GBP/USD – 1.5665
EUR/GBP – 0.8556
EUR/USD – 1.3405
GBP/AED – 5.7534
GBP/AUD – 1.6497
GBP/CAD – 1.5995
GBP/CHF – 1.4385
GBP/CNY – 9.6011
GBP/HKD – 12.1485
GBP/HUF – 343.73
GBP/INR – 91.924
GBP/JPY – 148.94
GBP/NZD – 1.9558
GBP/RUB – 50.3746
GBP/SEK – 10.0781
GBP/THB – 48.00
GBP/ZAR – 15.694
What was expected to be a quiet day for sterling quickly changed as sterling lost over a cent against the euro and the US dollar mid-morning. The initial catalyst for this was Consumer Price Inflation having increased at a rate of 2.7% in May, higher than expectations and up from 2.4% the previous months. Worries about what today’s Bank of England minutes will contain following this higher than expected inflation also unnerved the markets. And then we had the President of the European Central Bank announce that they were considering non-conventional measures to stimulate the Eurozone which lent support to the euro. Just highlights how nervous the markets still are and we are likely to see further volatility throughout today as the official BoE meeting minutes are released this morning and Bank of England Governor Mervyn King speaks this afternoon. Due to rising petrol, clothing and air travel costs keeping inflation rates stubbornly above the bank’s the 2.0% target, further quantitative easing and interest rate changes remain hot talking points. Speak to your trader now for an update on sterling activity.
The euro has now overtaken the Swedish kroner as the year’s strongest performing major currency. Though this is testament to investor confidence in Europe’s government officials, inflating currency value threatens smaller member nation’s ability to stimulate exports amidst the longest recession in memory. Indeed, recent statistics showed goods sold to outside the euro zone fell 0.8% from the previous quarter. Yesterday morning’s German ZEW sentiment surpassed expectations for the month. The reading emerges despite many markets weakening, and though a consensus of 38.5 is still well below March’s reading of 48.5, the single currency performed well on Tuesday – continuing its ascent against the US dollar and jumping by almost a cent against sterling. The survey certainly suggests Germany’s economy is due to gather pace in the second half of the year, though with the open possibility of negative deposit rates, an accommodative monetary policy and stagnant growth overall, a sustained rise in euro prices may not be healthy for a struggling Eurozone economy. Please telephone in for feedback on the euro.
Speculation swept through dollar markets yesterday with whispers of Federal Open Market Committee Chairman Ben Bernanke’s potential retirement, chatter about today’s Federal Reserve meeting and talk over when quantitative easing could be reined in. The result meant volatile conditions for the US dollar – moving quickly as it strengthened against sterling but lost ground again against the euro. Disturbance in price levels is likely to continue today as we wait on Mr Bernanke to clarify his strategy for the US monetary stimulus programme going forward in this evening’s press conference. Call your trader today to find out which way rates are trending ahead of this evening’s announcements.
Yesterday the Australian dollar continued to struggle; declining against all of its 16 major trading partners off the back of monthly central bank meeting minutes being released. The minutes show the Reserve Bank indicating that the currency will weaken further – paving the way for further easing of borrowing costs. The currency fell most notably against the US dollar, as did the New Zealand dollar and the Japanese yen as markets anticipate the result of the US central bank meeting. The Russian rouble also had a poor day on Tuesday as crude oil, Russia’s biggest export, dropped in price. Today we have the new Governor of the Bank of Canada making his first speech. As it is his first address, expect the markets to be particularly sensitive as he sets the tone for his monetary policy. We also have quarterly growth data coming out of New Zealand and Japanese trade balance figures this morning. Get in touch for rates and feedback on a busy Wednesday for global economic news. 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
All quiet before Federal Reserve Wednesday | Smart Daily Currency Note
GBP/EUR – 1.1744
GBP/USD – 1.5668
EUR/GBP – 0.8512
EUR/USD – 1.3339
GBP/AED – 5.7541
GBP/AUD – 1.6536
GBP/CAD – 1.5977
GBP/CHF – 1.4495
GBP/CNY – 9.6008
GBP/HKD – 12.1538
GBP/HUF – 342.95
GBP/INR – 91.803
GBP/JPY – 148.67
GBP/NZD – 1.9671
GBP/RUB – 49.9659
GBP/SEK – 10.154
GBP/THB – 48.256
GBP/ZAR – 15.723
A steady day for sterling yesterday, trading in a tight range against both the US dollar and euro as markets look ahead to today’s inflation figures. We anticipate an increase of 0.2% on last month’s figure of 2.6% which means that it still way ahead of the Bank of England’s 2.0% inflation target. The Governor and Members of the monetary policy committee will give evidence afterwards on inflation, interest rates and the economic outlook. The hearing lasts a few hours, so can create great volatility over that period of time. Call your trader today to find out which way rates are moving.
Euro trended in a narrow range yesterday against the USD and GBP, with little news out of Europe along with traders being cautious leading up to the Federal Open Market Committee projections and statement on Wednesday. Europe’s trade surplus did narrow to €16.1 billion from €18.1 billion in March which was positive but the German Bundesbank did warn that signals showing a slowdown in growth in Europe are appearing. Amidst this struggle for a return to growth, the European Central Bank (ECB) may be pressured to adopt more outlandish measures over the coming months. For example, we may see an increasing number of bank officials support a negative interest rate policy. Today all eyes will be on the ECBs President Draghi’s speech along with German Economic Sentiment data. Throughout yesterday and today we have the G8 meetings taking place in the UK. Get in touch for the latest updates.
Yesterday was a relatively quiet day for the US dollar as it traded within a narrow range against the euro and sterling. New York manufacturing data revealed conditions to be much more favourable than expected; although this had little impact on dollar performance as trading is likely to be more heavily influenced by events later in the week. Monthly figures illustrating the number of new building permits granted in the previous month are released today, giving an insight into future construction output. Furthermore, the monthly consumer price index, which gives an indication of inflation levels, is also released today and may prove to have an impact on trading ahead of the all-important Federal Open Market Committee (FOMC) statement which is due to be released on Wednesday. Call your trader now to see how markets react to the data released today and to get a live quote.
Yesterday we saw the Japanese yen drop against the majority of its 16 major peers. The slide was a response to stocks across the world performing well, triggering a sell-off from the safe-haven currency as traders looked to buy higher-risk, higher-yield markets. Similarly, we saw the Australian dollar, a high-risk currency, gain against all but one of its 16 main trading partners for the same reasons. The Canadian dollar had a strong day, trading at a one-month high versus its US counterpart amid significantly better-than-forecast Canadian bond-buying data. The data, which shows the number of bonds bought from overseas markets, is directly linked to currency demands. Today we see the release of monetary policy meeting minutes released by the Reserve Bank of Australia, as well as quarterly foreign trade data out of New Zealand. Eyes will also be on Northern Ireland for the G-8 meetings, which continue today. Get in touch for the latest rates.
Will UK data releases support sterling this week? | Smart Daily Currency Note
GBP/EUR – 1.1777
GBP/USD – 1.5693
EUR/GBP – 0.8486
EUR/USD – 1.3322
GBP/AED – 5.7639
GBP/AUD – 1.6309
GBP/CAD – 1.593
GBP/CHF – 1.4514
GBP/CNY – 9.6116
GBP/HKD – 12.177
GBP/HUF – 342.26
GBP/INR – 90.47
GBP/JPY – 149.22
GBP/NZD – 1.9393
GBP/RUB – 49.6518
GBP/SEK – 10.1141
GBP/THB – 48.132
GBP/ZAR – 15.586
UK economic data last week was limited and the main influence on global currency markets was the on-going discussion on whether or not the US would continue their programme of quantitative easing. A bit more light should be shed on this as we have the Federal Reserve meeting mid-week followed by their announcement of the meetings outcome. Here in the UK we have a range of different releases. Inflation for May is expected to come in slightly ahead of the previous month at 2.6% and retail sales figures for May are expected to have recovered from the fall of 1.3% in April. We also have the release of the minutes of the last meeting for the Bank of England monetary policy committee on Wednesday. Expectations are for no changes in the voting patterns from the last few minutes so anything different would have an immediate effect on sterling. So after a steady week last week we could see sterling moving quickly as the data releases move it one way or the other. Please call your trader for an update.
News from the Eurozone has been limited for the last few weeks. Probably helpful so that the powers that be can go about sorting out the mess of high unemployment and high debt, government and banking. The key data for release this week are the various purchase manager indices for manufacturing, construction and services. The expectation is for them to still be showing a contracting Eurozone economy albeit improved from the previous month. Recovery is going to continue to be slow. Call in now for the latest rates
The US dollar made a modest recovery towards the end of last week after experiencing some poorer performance earlier on. Reasonable increases were seen against the euro, whilst gains made against the sterling during the early afternoon were largely cancelled out by the end of trading in London. The monthly US Producer Price Index, which reflects the change in price in finished goods and services, was higher than expected, encouraging notions of a slowing down in quantitative easing. Conversely, consumer sentiment data was revealed to be worse than expected and may have held the US dollar back from making further gains. Expect to see the dollar move considerably this week in response to upcoming events. Tomorrow sees the release of the monthly consumer price index, ahead of the release of a statement by the Federal Open Market Committee on Wednesday. The members will give their projections for economic performance over the next two years and more importantly they will detail their predictions for future interest rate alterations. Traders will be paying close attention as they look for anything that might hint towards a scaling back of the bond-buying scheme of the world’s largest economy. Call in now stay up to date with market movements in what is sure to be a busy week.
Elsewhere there is a raft of data being released with retail sales in Canada and industrial production in Japan. However one key decision will be whether or not the Indian Reserve Bank cuts their interest rates. Difficult as their economy is faltering and needs a boost but there currency is under pressure and as such a cut would weaken it further and result in increased import costs and therefore increasing inflation. Call in now to see how the rupee and other currencies are faring this week.