Smart Daily Currency Note | Will euro/sterling breach 1.20?
GBP/USD – 1.5982
Sterling weakened across the board yesterday following a negative World Bank Report, which cut its global growth forecasts from 3% to 2.4% for 2013 year boosting demand for safe haven currencies. This negativity was mainly due to the high levels of unemployment and low business confidence in developed nations. Sterling’s depreciation against the US dollar continued, with rates dropping below the 1.60 mark for the first time since November, whilst remaining close to the nine month low against the euro. All eyes are on David Cameron for the time being as he prepares to reveal his plans on repatriating powers from the European Union – this uncertainty about the UK’s future within the European Union is hurting sterling. There is very little in terms of significant data released for the UK today; but, call in now to see if sterling will continue to fall.
In spite of the great range of data released yesterday in the US, the US dollar traded fairly steadily. It strengthened around lunchtime, falling below 1.60 against sterling as data showed that far more foreigners than Americans bought US debt last month than had been expected – indicating a demand for the currency, but settled back down in the afternoon. Key inflation data from the US showed that the Consumer Price Index dropped to 1.7% whilst the Core reading remained unchanged at 1.9%. The key data releases today include construction permits – an indicator of future construction activity, and unemployment data. Analysts are forecasting a small drop in unemployment claims. With the increased importance put on unemployment after policy makers linked it to monetary policy, if the drop exceeds economic forecasts expect markets to react strongly. Get in touch for the latest news and up to the second prices.
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