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Posted April 16th, 2014 by Charles Purdy

Sterling holds steady but worries over the Ukraine remain

Currency markets are surprisingly stable given the worries over the situation in the Ukraine and the “wish” of the ECB to see the euro weaken. In the UK inflation fell to 1.6%, the lowest level since November 2009. The UK currency had a rocky start, falling in advance of the release of the UK inflation figures, but soon appreciated to a higher level than it opened at, and continued to improve throughout the afternoon.  With the markets largely ignoring the inflation data, sterling improved against both the euro and US dollar as the situation in Ukraine looked to be escalating, with the deployment of troops to combat protestors. Strong inflation data from the US in the afternoon caused the dollar to recover, although sterling held on to maintain its high levels. Today sees the release of the unemployment rate from the UK, which is expected to remain at 7.2%. Any significant variation from this level, however, may result in movement for sterling.

Looking to buy or sell sterling? Contact your trader now for live rates and updates, as well as for currency-buying solutions.

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Posted April 14th, 2014 by Charles Purdy

Inflation and employment data key for sterling this week

Sterling had a tough end to last week, losing ground against all its major trade partners. After out-performing the dollar throughout the week, better-than-expected inflation and customer sentiment data out of the US spurred a late rally for the dollar. The euro’s mid-week momentum against sterling continued on Friday although we have seen a bounce up for sterling first thing this morning on concerns over the Ukraine.

The week ahead has limited UK data releases to boost sterling, with the majority of data coming from the US. However, whatever is released will be closely looked at to see if it gives further insight into the state of the UK economy. The release of inflation data from the UK on Tuesday looks to be the main event for sterling. Expectations is that we will see a slight fall to 1.6%. On Wednesday we have the release of key employment data including the unemployment rate which is expected to fall to 7.1% and earnings growth which is expected to be above the inflation rate for the first time since 2009. This could well boost consumer confidence.

Looking to buy or sell sterling? Contact your trader now for live rates and updates, as well as for currency-buying solutions.

Posted December 10th, 2013 by Charles Purdy

Sterling has a positive start to the week

Sterling had a quietly positive day yesterday, thanks largely to optimism ahead of upcoming data. Words from the Governor of the Bank of England kicked off the week, while investors looked to today’s manufacturing data to give further insight into the state of the UK economic recovery in an otherwise quiet week. Optimism that today’s figure will provide further backing to the economy’s strength prompted a second consecutive daily gain against the US dollar, while making a U-turn on the previous four days against the euro to also end in the positive for the day. Today does also offer a few other nuggets of data, with the trade balance for October and an independent growth estimate for November, which could club together to add to sterling movements. Call your trader now for the latest sterling rates, on the only day of key data for the UK this week.

Posted July 26th, 2013 by Charles Purdy

Mixed fortunes for sterling | Smart Daily Currency Note

Last week            This week
(GBP/EUR – 1.1591)   GBP/EUR – 1.1583
(GBP/USD – 1.5229)   GBP/USD – 1.5376
(EUR/GBP – 0.8626)   EUR/GBP – 0.863
(EUR/USD – 1.3137)   EUR/USD – 1.3273
(GBP/AED – 5.5934)   GBP/AED – 5.6475
(GBP/AUD – 1.6601)   GBP/AUD – 1.6612
(GBP/CAD – 1.5786)   GBP/CAD – 1.5809
(GBP/CHF – 1.4346)   GBP/CHF – 1.4297
(GBP/HKD – 11.811)   GBP/HKD – 11.9272
(GBP/INR – 91.027)   GBP/INR – 90.611
(GBP/JPY – 152.24)   GBP/JPY – 152.02
(GBP/NZD – 1.9230)   GBP/NZD – 1.9056
(GBP/SEK – 9.9832)   GBP/SEK – 9.9463
(GBP/ZAR – 15.046)   GBP/ZAR – 14.96

Sterling

After maintaining an upward trajectory for most of last week, sterling experienced more mixed fortunes this week. The pound performed well from Monday as Prime Minister David Cameron announced that improving economic conditions may allow the Coalition Government to implement tax cuts in the near future. Varying levels of trader optimism were seen in the run up to the release of UK GDP figures, which came out yesterday and revealed that the UK economy grew by 0.6% in the second quarter. These figures largely conformed to key predictions, however the possibility still remains that the Monetary Policy Committee may vote in favour of further quantitative easing when they meet again in August and the figures did little to play down that possibility, causing sterling to drop sharply against the majority of its major peers. Additionally, revisions of previous GDP figures revealed that recession in the UK was in fact worse than first thought, which further contributed to sterling weakness. Overall, sterling has certainly plateaued to a degree after performing well last week and we will need to see further strong economic data coming from the UK to maintain hopes of a sustainable recovery, persuade investors that the Monetary Policy Committee will not loosen monetary policy in August. If they do it would weaken the pound. There is little data of note being released today, but further movement may be seen as traders take stock of the GDP data and react to on-going speculation regarding future increases in quantitative easing. Call your trader now to track sterling performance.

Euro

A reasonable strong week for the euro was topped off yesterday when a survey showed better-than-expected business confidence coming out of Germany. Earlier in the week we had strong manufacturing and consumer confidence data coming out of the 17-member state. All these factors are suggestions that the Eurozone may be on course for a slight recovery in the second half of the year, and confidence in the market is quietly building. These are still early days, however, and there is every possibility that the region’s six-quarter recession will continue and drag into a seventh. Today is fairly quiet data-wise in the Eurozone, with the only event of note is the import price statistics coming out of Germany. Get in touch for live euro rates.

US Dollar

As expected, the US dollar sensitivity to economic data has been magnified recently following comments from the Chairman of the Federal Bank expressed his commitment to an accommodative monetary policy and this has caused it to be another tough week for the dollar. Early weakness was experienced in response to worse than expected existing home sales data, causing the dollar to slide against the majority of its major peers and notably to trade at one month lows against sterling. Some positive figures were seen mid-week, with increases seen in new home sales and better than expected growth in the manufacturing sector, prompted a slightly better performance. A survey of leading economists released this week revealed that that around 50% of those surveyed believe that the Federal Open Market Committee (FOMC) would reduce the pace of bond-buying by $20 billion per month in September. Such a result would boost dollar performance in the medium term and as a result this survey had a positive effect, but a reduction is by no means assured at this stage and speculation will continue as further economic data comes through. Finally, yesterday’s Unemployment Claims data and Core Durable Goods Orders figures both fell short of expectations and failed to give the dollar a boost. Whilst medium term forecasts are still geared towards a US dollar recovery, we will need to see some improved data coming through before progress is made in the short term. The only real data of note coming in before the weekend is revised consumer sentiment data being released this afternoon by the University of Michigan. Call in now to see how the US dollar reacts to the latest data releases.

Worldwide

Elsewhere, the big mover early in the week was the Canadian dollar. The Canadian currency showed notable gains against the majority of its peers on Tuesday, with significantly better-than-forecast retail sales data injecting confidence into the Canadian market. This confidence continued, as the Canadian currency held steady through Wednesday, and gained further still yesterday off the back of oil price speculation. The New Zealand dollar, after a fairly weak day on Wednesday, was the standout performer yesterday off the back of the Reserve Bank’s interest rate decision. The rate was held at 2.50%, but investors were left with the impression that come the first quarter of 2014, rates could well be on the rise. The Japanese yen had a bit of a seesaw week, with demand for the low risk currency fluctuating as confidence in global stock markets wobbled. Today, inflation data out of Tokyo this lunchtime will be likely to have an impact on the Japanese yen. Otherwise, a fairly quiet day. Get in touch for the latest rates.

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

Posted July 25th, 2013 by Charles Purdy

Will today’s Growth figures affect sterling? | Smart Daily Currency Note

GBP/EUR – 1.1614
GBP/USD – 1.5348
EUR/GBP – 0.8605
EUR/USD – 1.3212
GBP/AED – 5.6384
GBP/AUD – 1.6778
GBP/CAD – 1.5821
GBP/CHF – 1.4372
GBP/CNY – 9.4186
GBP/HKD – 11.9065
GBP/HUF – 343.62
GBP/INR – 90.544
GBP/JPY – 153.48
GBP/NZD – 1.9189
GBP/RUB – 49.98
GBP/SEK – 9.9607
GBP/THB – 47.689
GBP/ZAR – 14.967

Sterling

Sterling showed signs of weakness yesterday morning but largely recovered during the afternoon, until it fell sharply against the US dollar in the evening. The weakness experienced earlier in the day was seen in response to speculation by Goldman Sachs that there is a 50% chance that the Monetary Policy Committee will loosen monetary policy when they meet again in August. Sterling received a boost from the minutes of the last MPC meeting when it was revealed that the members voted unanimously in favour of maintaining the quantitative easing programme rather than increasing it. If there was a vote in favour of further asset-buying at the next meeting then this would have the opposite effect. However, after maintaining a reasonably strong upward trajectory for the past week sterling was still close to monthly highs against the dollar by the close of trading in London. Today sees the most important sterling data release of the week in the form of second quarter Growth figures. These are largely predicted to show consecutive growth, but expect volatility should we see any significant divergence between average predictions of 0.6% growth and the actual figure. Call in now to see how the Growth figures affect sterling performance.

Euro

There were signs of life coming from the 17-member state yesterday as strong manufacturing data out of Germany and France bolstered demand for the region’s assets. It triggering the euro to climb against the majority of its most-traded peers, and to 1-months highs against the US dollar before tumbling as Barack Obama began to speak. The euro gains were not as considerable as they might otherwise have been if it were not for the conservative monetary policy implemented by the European Central Bank. Nevertheless, the data out of Europe so far this week is encouraging, and could signal the start of a slight recovery in the latter parts of this year. The significant piece of data our of Europe today is the results from the German business climate survey, a good indication of wider European economic conditions. Get in touch for the latest euro news.

US Dollar

The US dollar had a mixed day yesterday trading at variable rates against sterling and euro throughout the day, but strengthened aggressively in the evening as Barack Obama began to speak about the US economy. The day’s economic data releases were marginally more positive than expected, with increases seen in new home sales and better than expected growth in the manufacturing sector. This prompted moderate dollar strength during the afternoon. The US dollar strengthened yesterday evening following comments from the US President on the state of the US economy where we suggested the US had “made it through the worst of yesterday’s winds“. Unemployment claims data is being released this afternoon and is likely to impact on the US dollar’s performance today as investors will be interested to see how the world’s largest economy is faring in its pursuit of an unemployment rate of 6.5%. Additionally, today’s monthly Core Durable Goods Orders data is a leading indicator of US production levels and has a similar potential to have a substantial impact on the performance of the dollar. Call in now to see if this fresh economic data can reverse US dollar fortunes.

Worldwide

Elsewhere, the major movements were shown by the New Zealand and Australian dollars yesterday, as the commodity-backed currencies stumbled for the first time in four days following the release of weaker than expected Chinese manufacturing data which showed further declines through July, hitting the lowest level for 11 months. Strong local trade balance figures out of Japan yesterday morning were not enough to prevent the yen falling against its major trading partners. Investors took confidence from tentative signs of recovery out of Europe, causing demand to fall for the low risk, low yield Japanese currency. The Canadian dollar held firm on yesterday’s strong performance. Last night the Reserve Bank of New Zealand met to make its decision on interest rates, and later today we have consumer inflation data coming out of Japan. Get in touch for the latest rates.

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

Posted July 24th, 2013 by Charles Purdy

Sterling steady as we await UK Growth data tomorrow | Smart Daily Currency Note

GBP/EUR – 1.1642
GBP/USD – 1.5383
EUR/GBP – 0.8588
EUR/USD – 1.3213
GBP/AED – 5.6502
GBP/AUD – 1.6612
GBP/CAD – 1.5841
GBP/CHF – 1.4399
GBP/CNY – 9.4436
GBP/HKD – 11.9349
GBP/HUF – 345
GBP/INR – 91.341
GBP/JPY – 153.51
GBP/NZD – 1.9282
GBP/RUB – 49.7285
GBP/SEK – 9.9201
GBP/THB – 47.572
GBP/ZAR – 14.948

Sterling

Sterling traded within a narrower range yesterday as we saw a decrease in volatility across the currency markets. The pound has made reasonably consistent gains since last week’s Monetary Policy Committee meeting minutes were released. A report from the British Bankers’ Association released yesterday morning showed that UK mortgage approvals increased during June, although this increase was marginally lower than expected. As a result, the data had little overall effect and sterling made good the slight losses it experienced earlier in the day against the US dollar and weakened very slightly against the euro. Preliminary UK growth data for the second quarter will be released tomorrow and is likely to have a strong bearing on performance as investors look to ascertain how much faith to put in a sustained economic recovery for the UK. Ahead of that, the Confederation of British Industry releases data detailing expected industrial orders over the next three months this morning, which may also have cause a degree of volatility. Call in now to see how sterling reacts.

Euro

The euro performed reasonably well yesterday, making modest gains against sterling and the US dollar. Consumer confidence data came through marginally better than expected, which fared well for the single currency. Having experienced little in the way of influential data coming from the Eurozone when compared with the UK and US, today sees a buck in the trend as investors will look to German and French Flash Manufacturing data as key indicators of economic strength. Marginal contraction is predicted in both countries, however varying figures, especially emanating from Germany could give rise to sharp movement. Call in now to see how to track the reaction from the euro.

US Dollar

After a tough few days for the US dollar following on from the Chairman of the Federal Bank’s report to Congress last week, yesterday provided some respite. The dollar saw little movement against sterling and weakened slightly against the euro. A Bloomberg survey of leading economists revealed that that around half of those surveyed believed that the Federal Open Market Committee (FOMC) would reduce the pace of bond-buying by $20 billion per month in September. Such a result would boost dollar performance in the medium term, but is by no means assured at this stage. Furthermore, it may still be some time before interest rates are increased following any reduction of asset-purchasing and whilst the outlook is generally positive for a US recovery in the long term, it may be some time before we see any substantial dollar rally. Whilst uncertainty reigns, speculation by key figures and incoming economic data releases will continue to cause volatility. One of such releases will be occurring this afternoon and comes in the form of New Home Sales data from the US. Monday’s Existing Home Sales data contributed to dollar weakness on Monday and traders will look to today’s figures as a further indicator of economic strength or lack of economic strength. Call in now to keep pace with market movements.

Worldwide

Elsewhere, the big mover yesterday was the Canadian dollar. The Canadian currency showed notable gains against the majority of its most-traded peers as a result of significantly better than expected retail sales data. The retail figures showed an impressive 1.9% increase in May, the biggest monthly jump in 3 years, quadrupling the 0.4% projections. These figures, off the back of strong wholesale and manufacturing figures last week, all point toward less slack for the Bank of Canada to continue its generous monetary policy. The Japanese yen, after a strong day yesterday, tumbled against all of the majors as certain over-exuberance receded following the weekend’s election result, in which fiscal and monetary policy stimulus supporter, Shinzo Abe, was given the nod from the populace. Overnight we saw trade balance data out of Japan and New Zealand, as well as Australian inflation data. This evening we also have short term interest rate decision out of New Zealand. Get in touch for the latest rates.

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

Posted July 23rd, 2013 by Charles Purdy

Will sterling benefit from the birth of a Royal baby? | Smart Daily Currency Note

GBP/EUR – 1.1645
GBP/USD – 1.5364
EUR/GBP – 0.8583
EUR/USD – 1.3189
GBP/AED – 5.6434
GBP/AUD – 1.6581
GBP/CAD – 1.5863
GBP/CHF – 1.4379
GBP/CNY – 9.4293
GBP/HKD – 11.9202
GBP/HUF – 342.79
GBP/INR – 91.647
GBP/JPY – 152.83
GBP/NZD – 1.9198
GBP/RUB – 49.6331
GBP/SEK – 9.9312
GBP/THB – 47.515
GBP/ZAR – 15.072

Sterling

Even before the announcement of a new Royal baby and the third in line to the throne, Sterling continued its upward trajectory yesterday as hopes for a sustainable economic recovery in the UK increased ahead of Thursday’s second quarter Growth figures. The pound made gains against the majority of its major trading partners and most notably continued to strengthen against the US dollar for the fifth day in a row as it was traded at the highest rate since June. Prime Minister David Cameron announced that improving economic conditions may allow the Coalition Government to implement tax cuts in the near future, lending further weight to sterling optimism. Thursday’s Growth data will be integral in determining whether we see sterling continue to appreciate. Further growth would lend support to the pound by giving credence to the notion of a sustainable economic recovery for the UK. Predictions range from around 0.3% to 0.8% growth, with most key figures expecting 0.6%. Speculation ahead of the release will continue to affect sterling performance and solid growth figures are likely to help sterling maintain its strong recent performance, but bear in mind that if the figures undermine the positivity seen in recent days then we are likely to see a sharp decline. Additionally, this morning sees the release of Mortgage Approval data from the British Bankers’ Association, which has the potential to have a more immediate impact on performance. Call in now to see whether sterling strength has continued.

Euro

The euro’s performance was largely dictated by events elsewhere yesterday as it made moderate movements to strengthen against the US dollar – reaching its highest level in a week – and weaken against sterling. The seventeen-nation currency derived some support from news that Portuguese Prime Minister Pedro Passos Coelho and his Government will remain in office for their full term as opposed to having to face elections which would have put the Portuguese compliance with their bailout plan in jeopardy. This is certainly positive news for the Eurozone, but perhaps did not have a strong an impact on the markets as events elsewhere. Not much influential data comes out today, but looking ahead to tomorrow, German and French flash manufacturing data will impact on euro performance. Call in now to track euro movement and for a live rate.

US Dollar

The US dollar performed poorly yesterday as a combination of a persistent uncertainty regarding the possible tapering back of the bond-buying programme and worse than expected existing home sales data caused the dollar to slide against the majority of its major peers. As expected, the US dollar’s sensitivity to economic data has increased following Ben Bernanke’s expressed commitment to an accommodative monetary policy and the reaction yesterday was negative. Most notably the US dollar traded at its lowest rate this month against a resurgent sterling. Whilst there is not a great deal being released today in the way of influential data impacting on the world’s largest economy, the temperamental dollar may still see movement in response to speculation regarding future monetary policy. Tomorrow sees the release of existing home sales data, which – as with the home sales data released yesterday – has the potential to cause further dollar volatility. Call in now to keep pace with dollar volatility.

Worldwide

Monday was a quiet day for the release of economic data elsewhere in the world. Sterling held its own or gained against the majority of other currencies as the feel good factor seems to be sticking to sterling for the short term. The main release today are the retail sales figures in Canada which are expected to show a modest improvement of 0.3%. Call in to see how the birth of a Royal Baby and the third in line to the throne is affecting sterling throughout the world!

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

Posted July 22nd, 2013 by Charles Purdy

Will Sterling’s good run continue? | Smart Daily Currency Note

GBP/EUR – 1.1610
GBP/USD – 1.5278
EUR/GBP – 0.8612
EUR/USD – 1.3160
GBP/AED – 5.6114
GBP/AUD – 1.6588
GBP/CAD – 1.5822
GBP/CHF – 1.4360
GBP/CNY – 9.4484
GBP/HKD – 11.8552
GBP/HUF – 341.74
GBP/INR – 90.48
GBP/JPY – 152.75
GBP/NZD – 1.9281
GBP/RUB – 49.3507
GBP/SEK – 9.9634
GBP/THB – 47.28
GBP/ZAR – 14.9641

Sterling

Sterling ended last week on a largely positive note having risen for four days straight against the US dollar and made notable gains against the euro. Sterling benefited from the Monetary Policy Committee minutes released on Wednesday which showed all nine members voting against increasing quantitative easing. Sterling also received some support from Friday’s Public Sector Net Borrowing data that revealed a slight reduction in the deficit during the month of June. Furthermore, a number of key figures predict that key UK GDP data due this Thursday will show an increase in growth during the second quarter giving performance an extra boost. Looking ahead to this week, the aforementioned GDP figures are likely to have a substantial impact upon sterling strength should they differ from last week’s predictions. Outside of this, there is not a huge amount of data being released this week with the potential to impact performance. Mortgage approval data – a leading indicator of demand for housing – has the potential to have some influence when it is released on Tuesday, but the GDP data on Thursday along with on-going speculation on future monetary policy are likely to fuel market movement. Call in now to track sterling’s performance this week.

Euro

The Euro stayed fairly range bound on Friday with no data of high impact being released. Although German Chancellor Merkel gave positive vibes whilst discussing the economy in Germany and the euro-zone, it had a muted effect on the markets. Perhaps with her looking for re-election in September, it was expected that she would remain optimistic. We have a quiet day again for the euro today, but with French and Germany manufacturing PMI data on Wednesday and Germanys Business Climate survey on Thursday, any unexpected data is likely to cause volatility for the currency. There are also increasing concerns for southern state debts and additional funding requirements. Portugal, Cyprus and Greece seem to be at the top of this list and could significantly increase instability for the Eurozone. So call your trade for the latest rates and updates.

US Dollar

After a highly volatile week, the US dollar weakened on Friday on the back of on-going concerns about the tapering back of US asset-purchasing. Now that Fed Chairman Bernanke has stated that US monetary policy will be highly accommodative, the US dollar seems to be highly sensitive to new economic data and speculation amongst investors. Despite the fact that ratings agency Moody’s upgrading the AAA credit rating of the world’s largest economy from negative to stable, the currency lost ground against most of its major peers. Given the current sensitivity to new data, this week we can expect the release of Existing Home Sales data on Monday to spark movement as these figures serve as a leading indicator of economic health. Likewise, New Home Sales data on Wednesday is likely to have some impact on the dollar’s performance. Finally, on Thursday traders will look to Unemployment claims data to reveal how the US is faring in its quest to meet unemployment targets. Expect plenty of volatility amidst a raft of data and on-going uncertainty about future monetary policy. Call in now to keep pace with market movements.

Worldwide

Elsewhere the Canadian dollar weakened on Friday following a government report showing inflation lower than the Bank of Canada’s target of 2%. The New Zealand dollar gained momentum with the People’s Bank of China (New Zealand’s largest trading partner) announced it is going to remove limits on lending rates. The Yen weakened against the US dollar leading up to upper-house elections in Japan, which will be closely watched. The South African rand also gained strength against the US dollar amidst doubts that the US may reduce stimulus as early as expected. Today we have core retail sales from Canada and New Zealand trade balance figures. Tomorrow we will have Chinese Flash Manufacturing Purchasing Managers index along with New Zealand interest rate statement. Call now the latest news and updates.

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

Posted July 19th, 2013 by Charles Purdy

Another roller coaster week for sterling | Smart Daily Currency Note

Last week                  This week
(GBP/EUR – 1.1591)   GBP/EUR – 1.1591
(GBP/USD – 1.5138)   GBP/USD – 1.5229
(EUR/GBP – 0.8624)   EUR/GBP – 0.8626
(EUR/USD – 1.3057)   EUR/USD – 1.3137
(GBP/AED – 5.5598)   GBP/AED – 5.5934
(GBP/AUD – 1.6523)   GBP/AUD – 1.6601
(GBP/CAD – 1.5688)   GBP/CAD – 1.5786
(GBP/CHF – 1.4365)   GBP/CHF – 1.4346
(GBP/HKD – 11.742)   GBP/HKD – 11.811
(GBP/INR – 90.864)   GBP/INR – 91.027
(GBP/JPY – 150.00)   GBP/JPY – 152.24
(GBP/NZD – 1.9266)   GBP/NZD – 1.9230
(GBP/SEK – 10.066)   GBP/SEK – 9.9832
(GBP/ZAR – 15.204)   GBP/ZAR – 15.046

Sterling

Sterling had a roller coaster week dropping to  a four month low against the euro and struggling against the dollar earlier this week as weaker than expected inflation data appeared to give the Bank of England more licence to keep monetary policy loose. This meant that all eyes were on Wednesdays release of the minutes from the first Monetary Policy Committee meeting with the new Governor Mark Carney in charge. What was revealed caught the market by surprise in that all 9 members voted in favour of maintaining the Bank of England’s quantitative easing target instead of increasing it. This caused sterling to jump over a cent against the US dollar and euro as many key figures expected the vote to show several members (including the new Governor Mark Carney) to vote in favour of increasing the quantitative easing program, rather than the unanimous decision against this that was revealed. Sterling was also boosted by the news that unemployment claims had dropped by over 20,000 in June, whilst retail sales figures released yesterday came out as expected. This morning sees the release of UK Public Sector Net Borrowing data and a high deficit can have a negative effect on sterling’s performance. Call in now to track developments.

Euro

It seems that the euro is not master of its own destiny this week as it continues to play a largely reactionary role whilst events in the UK and USA continue to dominate. The euro actually faired fairly well despite German economic sentiment proving to be worse than forecast. Current account data, showing the difference in value between imports and exports came in slightly worse than expected. Monthly German manufacturing data may impact performance of the single currency today. Additionally, it is worth noting that we have G20 meetings taking place on Saturday and discussions therein, may have implications for the euro and its major trading partners. Call in now for live rates and up to date information.

US Dollar

The US dollar had a poor start to the week as retails sales figures came in much lower than anticipated. Whilst typical estimates put growth at 0.8%, the figures revealed growth to be only at 0.4%, underlining the fact that recovery has been less convincing in the second quarter for the US. Many had hoped for some clarity regarding when the Federal Bank may look to start tapering its quantitate easing program when the Chairman of the Federal Reserve addressed congress this week; however, the Chairman asserted that a tapering of bond-buying must be based on consistent economic data and that a slowing in asset-purchasing would be likely to happen if US inflation made a determined move towards the 2% target (which this week came out showing an inflationary figure of only 0.2%). Some respite came yesterday as employment data released showed a better than expected drop in US unemployment claims in the previous month. However, whilst Bernanke remains committed to an accommodative policy the US dollar may continue to oscillate until we see the cumulative positive data that the Federal Open Market Committee is looking for. After an eventful week, there is less provocative data on offer today, although given sharp movements we have seen in recent days, some further volatility is not implausible. Call in now to keep pace with market movement.

Worldwide

Elsewhere, the Canadian dollar dominated much of the headlines this week as it weakened on Monday alongside falling commodity prices. Whilst manufacturing sales figures came out as expected, the Bank of Canada (with its new Governor at the helm) suggested that the economy remained sluggish and all but ruled out a potential interest hike in the near future causing the Canadian dollar to weaken further still. The Australian dollar performed well following the release of the minutes from the latest Reserve Bank of Australia rate setting meeting which outlined the central banks sentiment that interest rates were at an appropriate level, henceforth, seemingly removing the possibility of another rate cut in the near term. The Polish zloty also performed well following new government plans that will widen the budget deficit in order to boost the economy. Core inflation data released out of Canada will be the main release on the agenda, but, call Smart today for the latest news, and live quotes, 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

Posted July 18th, 2013 by Charles Purdy

Sterling benefits from BoE surprise | Smart Daily Currency Note

GBP/EUR – 1.1574
GBP/USD – 1.5161
EUR/GBP – 0.8637
EUR/USD – 1.3099
GBP/AED – 5.5699
GBP/AUD – 1.6567
GBP/CAD – 1.5818
GBP/CHF – 1.4317
GBP/CNY – 9.3087
GBP/HKD – 11.7616
GBP/HUF – 339.78
GBP/INR – 90.419
GBP/JPY – 152.1
GBP/NZD – 1.9282
GBP/RUB – 49.0979
GBP/SEK – 9.993
GBP/THB – 47.106
GBP/ZAR – 14.943

Sterling

Sterling appreciated sharply yesterday morning in response to a double dose of positive data. The Monetary Policy Committee meeting minutes revealed a surprise 9-0 vote in favour of maintaining the Bank of England’s quantitative easing target instead of increasing it. This caused sterling to jump over a cent against the US dollar and euro as many key figures expected the vote to show several members (including the new Governor Mark Carney) to vote in favour of increasing the quantitative easing program, rather than the unanimous decision against this that was revealed. Performance was further boosted by data showing that unemployment claims dropped by over 20,000 in June, a much greater reduction than predicted. Sterling continued to perform well yesterday afternoon, trading at 1.16 against the euro and hovering above 1.52 against the US dollar. This morning sees the release of monthly UK retail sales data, which has the potential to either check or reinforce today’s optimism should figures differ significantly from predictions. Call in now to stay on top of continuing market reaction.

Euro

It seems that the euro is not master of its own destiny this week as it continues to play a largely reactionary role whilst events in the UK and USA continue to dominate. The euro weakened against sterling considerably yesterday morning and continued to decline throughout the day. The euro experienced more mixed fortunes in its performance against the dollar with reasonable movement seen in both directions, but little net movement, by the close of trading in London. Eurozone current account data, which details the difference in value between imported and exported goods may play some role in the euro’s performance today, as might Spanish 10-year bond data, but it is likely that events elsewhere may continue to dominate the headlines and drive market movement. Call in now to keep pace with developments and to get a live rate.

US Dollar

If investors were hoping for a clearer expression of intent from Fed Chairman Ben Bernanke, then they were certainly disappointed by his somewhat illusive report to Congress. Rather than laying out plans for future reductions in asset-buying, Bernanke remained accommodative and stated that the programme may be increased or tapered depending on economic conditions. Going forward this means that the US dollar is likely to be sensitive to changes in economic data in particular inflation data, as Bernanke stated that a slowing in asset-purchasing would be likely to happen if US inflation made a determined move towards the 2% target. Looking at the rates, the US dollar depreciated considerably against sterling in response to sterling strength, whilst a more mixed performance was registered against the euro. Bernanke will continue to testify to Congress today as US unemployment claims data is released as well as Philadelphia manufacturing data. Expect further volatility as markets react. Call in now to stay on top of developments and to receive a live rate.

Worldwide

Elsewhere, the Canadian dollar struggled yesterday after the Bank of Canada (with its new Governor at the helm) suggested that the economy remained sluggish and all but ruled out a potential interest hike in the near future. The Japanese yen struggled somewhat yesterday as confidence in the global markets grew. The Turkish lira was in the limelight once more as investors continue to speculate as to what action the central bank will take in the rate setting meeting next week. Overnight we saw the release of business confidence figures from Australia  and later on today wholesales sales figures may influence the relative strength of the Canadian dollar. Call Smart today for the latest news, and live quotes, for your currency.

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