Cyprus unsettles the euro | Smart Daily Currency Note
GBP/USD – 1.5172
Yesterday was a mixed day for sterling with gains on some fronts and losses on others. It made further gains against the euro, reaching a six week high of 1.1820 following comments from the head of the Eurogroup of Eurozone finance ministers who suggested that many countries needing a bail out would follow the Cyprus model of a tax on bank deposits. On the other front, sterling lost ground against the US dollar as data released showed that the number of new mortgages approved for home purchase in UK fell below the market estimate. Today the Chancellor will testify on the 2013 Budget to the Treasury Select Committee, but his comments are not expected to cause any big disruption to the markets. We also have realised sales figures which are predicted to rebound this month after the indicator came out worse than expected in February. Call in today for the latest updates on sterling.
The US dollar had a strong day yesterday, up against all of its major peers except the Japanese Yen. This strength was as a result of a risk averse market with investors looking to purchase safe-haven currencies, as market uncertainty continues to dominate the markets in response to the situation in Europe. Today is an interesting day for the US Dollar, as three important pieces of data are released. Firstly, the monthly Core Durable Goods statistics, which is a leading indicator for manufacturing, is forecast to show a drop in growth of just 0.7%. We also have consumer confidence figures and statistics on the number of new home sold in the last month. These are all key indicators for the state of the economy in the US and will be watched closely by investors. Stay tuned for the latest rates.