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Posted February 27th, 2013 by Charles Purdy

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

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.

Euro

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.

US Dollar

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.

Worldwide

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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Posted August 12th, 2010 by Charles Purdy


EURO/GBP – 1.215
US$/GBP – 1.569
CHF/GBP – 1.658
CAN$/GBP – 1.642
AUS$/GBP – 1.746
NZD/GBP – 2.197
EURO/US$ – 1.291

Sterling dropped by nearly 1% against the US dollar yesterday after the Bank of England’s quarterly inflation report said that inflation would drop below the 2% target level in the next 2 years. In addition the Bank left the door wide open for further emergency funding or ‘Quantitative Easing’. The Bank also slashed growth forecasts on the grounds that there is significant uncertainty ahead for the UK, European and US economies. With markets pricing in increased inflation following next year’s VAT hike to 20%, a downward revision came as a bit of shock to many investors and set the pound on track for the biggest daily drop against the US dollar since the election. The economic prospects for the UK were described as “highly uncertain” and as such further emergency funding could be used if needed. There is hardly any data out today, and as such expect the pound to underperform against the US dollar as a result of continued poor sentiment. Get in touch now for a live exchange rate.

In the Eurozone, the euro dropped by over 1% sterling and over 2% against the US dollar as investors pulled back from riskier investments after the US Federal reserve announced a further round of quantitative easing. The move sparked investors in European assets to pull back as concerns over growth left them fleeing towards safer currencies. Sentiment towards the pound is better than the euro and as such, despite a poor assessment from the Bank of England, sterling strengthened by over 1% to hit a high of 1.2160/£1. Out tomorrow, there is the European Central Bank monthly bulletin and monthly industrial production data.

In the USA, the main news was that the Federal Reserve announced that they will add additional emergency funding into the US economy to counter the flagging economy. In addition, poor data added to the US dollar’s problems as the trade deficit widened by nearly $8bn. Out tomorrow, there is further data on Unemployment claims. Call in now for a live exchange rate to ensure you don’t miss out.

Elsewhere, New Zealand’s manufacturing sector shrank for the first time in 11 months which points to waning demand that will put pressure on employment. In addition, the Australian economy added 23,500 jobs in July, but the full time employment rate dropped for the first time in nearly a year. Ensure you don’t miss out and speak to one of the team today.

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

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