Smart Daily Exchange Rates
GBP/EUR – 1.1952
GBP/USD – 1.6130
EUR/GBP – 0.8364
EUR/USD – 1.3493
GBP/AED – 5.9272
GBP/AUD – 1.7329
GBP/CAD – 1.6628
GBP/CHF – 1.4620
GBP/CNY – 9.8720
GBP/HKD – 12.506
GBP/HUF – 357.12
GBP/INR – 101.22
GBP/JPY – 157.83
GBP/NZD – 1.9501
GBP/RUB – 52.401
GBP/SEK – 10.370
GBP/THB – 50.330
GBP/ZAR – 16.360
Very busy week for data, will it support or undermine sterling?
Sterling enjoyed a good end to the week, thanks to words of support on the UK economy from the Governor of the Bank of England Mark Carney in a UK newspaper. He stated that he felt the asset purchasing levels were adequate, and no more stimulus was needed, highlighting that the recovery was going well. As such, the pound made gains against 14 of its 16 largest trading partners, heading towards 2013 highs against the US dollar and the euro. Today is a timid start to the week, with the mildly influential data being net lending to individuals. Tomorrow picks it up a little, as the manufacturing purchasing managers index (PMI) is to be released. Wednesday is the turn of the construction PMI, with Thursday completing the trio as services PMI data is due. As seen recently, positive data from these areas can have a big impact on the strength of the currency, and so investors will be keen to hear the figures this time around. Friday then draws a blank, as sterling could see the week end on a flat note although you would expect volatility as key figures will be released from the US. Get in touch with your trader now, as we enter a new week with consistent points of interest.
Political problems in Italy reignite worries
The euro performed reasonably well on Friday on the back of German inflation data, which showed levels of inflation to be at a three month low. This has helped to create positive conditions for German consumers and bode well for the Eurozone recovery. Despite Fridays more positive one, the euro has started this week on the back foot, as markets are nervous that we could see the a credit rating agency downgrade for Italy as the Italian government could be near collapse following Silvio Berlusconi’s decision to remove five ministers from government. You can expect the markets to remain nervous ahead of the confidence vote on Wednesday. The European Central Bank’s interest rate decision on Wednesday and following press conference could well be influential although no change is expected so it will be the following press conference that will have the most substantial effect as investors look for clues as to the outcome of future monetary policy decisions. Other events likely to play a role in determining euro performance include today’s flash Consumer Price Index figures for the Eurozone. These are a key indicator of inflation. Another key indicator is seen on Friday when Germany releases its monthly Producer Price Index data. Following last Friday’s positive data, expectations will be for reasonable figures to bolster the single currency. Call your trader now to see how the euro fares this week.
No agreement from the politicians could weaken the US dollar
Friday closed out the US dollar’s week in quiet fashion, with no drastic events to impact the markets although debt worries were at the forefront of traders’ minds. The Republicans and Democrats have failed to come to an agreement regarding the US budget over the weekend and as a result it is looking increasingly likely that tonight we will see a US government shutdown for the first time in 17 years. Investors will have to wait until tomorrow for the first piece of important data outside of the developments regarding the budget, which will be the manufacturing purchasing managers index (PMI) data from the Institute for Supply Management. Moving to the middle of the week, on Wednesday we have the ADP non-farm employment change, and on Thursday we have the non-manufacturing PMI and the weekly unemployment claims. On Friday we have the highly influential non-farm employment change and the overall unemployment rate – with an improving labour market heavily linked to the Federal Reserve commencing its tapering program – these figures could spark a significant reaction in the market. Call your trader now for the latest US dollar rates, at the start of a bottom heavy week.
Safe haven assets likely to benefit from US uncertainty
Elsewhere, safe-haven currencies such as the Swiss franc and Japanese yen benefited from uncertainty over the US budget and a potential governmental shutdown, at the same time, we saw riskier, higher-yielding currencies suffer. Today we have Canadian GBP figures released which are expected to show the Canadian economy grew at a rate of 0.6% and later on this week we have more data from Canada in the form of purchasing managers index (PMI) figures. We have a raft of data from Australia including retail sales, trade balance figures and building approvals statistics; this come in addition to the central bank decision on monetary policy; however, no change is expected. We also have the Japanese central bank monetary policy statement and press conference as well as a swathe of Japanese data, influential manufacturing data out of China and PMI data from Sweden and Norway. Call in now for the latest prices and a market update.
Smart Daily Exchange Rates
Last Week This Week
(GBP/EUR – 1.1869) GBP/EUR – 1.1923
(GBP/USD – 1.6065) GBP/USD – 1.6091
(EUR/GBP – 0.8423) EUR/GBP – 0.8382
(EUR/USD – 1.3532) EUR/USD – 1.3492
(GBP/AED – 5.8991) GBP/AED – 5.9098
(GBP/AUD – 1.6991) GBP/AUD – 1.7184
(GBP/CAD – 1.6493) GBP/CAD – 1.6592
(GBP/CHF – 1.4616) GBP/CHF – 1.4625
(GBP/HKD – 12.454) GBP/HKD – 12.478
(GBP/INR – 99.639) GBP/INR – 99.529
(GBP/JPY – 159.41) GBP/JPY – 158.60
(GBP/NZD – 1.9133) GBP/NZD – 1.9343
(GBP/SEK – 10.146) GBP/SEK – 10.320
(GBP/ZAR – 15.589) GBP/ZAR – 16.095
Sterling enjoys a good start to Friday
Although a quiet week for data sterling has enjoyed a positive start to Friday gaining ground against both the euro and the US dollar which has brought it back close to the levels seen at the start of the week. On Wednesday we had impressive UK retail data which buoyed sterling gaining in particular against the US dollar, as it headed back towards its recent 8 month highs. Yesterday though we had disappointing current account balance figures, the difference between the country’s imports and exports, as they failed to reach expected level. The deficit did narrow, but not by its desired amount, and this dampened investors belief in the economy’s recovery. Today, the Nationwide house price index is the only data that may affect sterling’s strength, and with nothing else, we could see a quiet end to the week. Call your trader now for latest price on sterling, at the end of an up and down week.
Mixed messages highlight Eurozone uncertainty
The euro fluctuated within a relatively narrow range this week in response to mixed data. The week started poorly for the single currency as French and German manufacturing data came through worse than expected – showing contraction for the French sector. European Central Bank president Mario Draghi also dampened performance by hinting that there may be a need for further refinancing operations in future. If further refinancing is needed this is likely to have a negative effect on the euro, although the effect of this announcement was limited by Draghi’s stand-off approach. The euro’s performance improved during Tuesday and Wednesday as first Business Climate data and then Consumer Confidence data both proved to be strong – with consumer confidence at its highest level since the 2008 crash. There were few surprises towards the end of the week as the seventeen-nation currency remained fairly steady against sterling and lost some ground against the US dollar. Today investors will be paying close attention to Draghi’s second address of the week. His words on Monday were pessimistic – should Draghi further play down the recovery in the Eurozone we can expect further euro weakness. Call your trader now to see how markets react to Draghi’s speech, German inflation data, and French consumer spending figures.
Uncertainty over tapering and debt ceiling undermine the US dollar
The US dollar didn’t get off to a very good start to the week, as reaction to the tapering revelations continued. Words from a member of the Federal Open Market Committee further impacted on the currency, as he supported the decision to not reduce the bond buying levels. Worse than expected flash manufacturing data also undermined the dollar. Things picked up on Tuesday, after more member of the FOMC spoke, and prompted speculation that tapering was actually more likely to be implemented sooner. Wednesday was quiet, as most data including the new homes sales was in line with expectations. Positive unemployment levels helped the dollar yesterday, especially as this is closely linked to whether this will get started soon. Today, the most important event is another speech from a member of the FOMC, and his words could decide how this week finishes. Call your trader now for the latest on the US dollar, while tapering decision keep investors guessing.
Japanese yen benefits from its safe haven status
Elsewhere, the overall theme seen this week has been a shift away from higher risk currencies for which we saw a demand last week with the Japanese yen being buoyed by demand for safe-haven currency. Strong demand for the Japanese currency continued yesterday. Conversely, we saw the commodity-backed currencies perform badly, as nervous market sentiment meant traders bought out of the higher yielding assets. Throughout the week we saw the Australian and New Zealand dollars perform badly; the New Zealand dollar perform particularly badly on Wednesday, losing out against all of its 16 major trading partners following the statement from the Fonterra Group (New Zealand’s biggest company and the largest dairy export in the world) warning earnings could fall sharply for the second half of the year. A quiet day on the data front today, with inflation data out of Japan being the only release of note. Get in touch for a live rate.