Aussie dollar yet again hits multi year highs against the pound

US Dollar:

The markets became a little wary yesterday which saw the dollar take back some losses made against the majors earlier in the week. Investors remain hesitant due to concerns about European debt and whether stock valuations are getting a little high. This cautious approach saw the greenback make inroads against both the pound and euro, as the two European currencies battle it out in the ugly currency competition. Given the lack of economic data or news to trade off, the forex markets are squarely focused on fluctuations in stock, commodities and risk appetite in general. US president Barack Obama met with Greek Prime Minister yesterday but the White House said Greece’s fiscal problems “can and should” be resolved by the European Union, dismissing the notion that the US could be involved in a bailout.
Data 19.00: Monthly Budget Statement expected -$202.0B from -$42.6B.

Pound:

The pound took a beating in the markets yesterday, falling against the majors as the UK’s fiscal prob-lems reverberates, however, concerns about similar problems in Portugal is keeping the lid on the single curren¬cies gains against sterling. Fitch ratings said yesterday that the sharp deterioration in the UK’s sovereign credit profile during the global financial crises has been within the tolerances of triple-A rated countries, which did calm some fears about the under-pressure pound. But Brian Coulton, managing director of Fitch ratings, said the UK has seen the most rapid rise in its debt-to-gross-domestic-product ratio among triple-A rated countries. The gov¬ernments current plan to cut the deficit by a half over four years is “too slow,” Fitch’s Coulton added. All this on
the back of the UK’s trade balance coming in at –8.0B from an expected –6.9B, much worse than expected, has weighed heavily on sterling. Cable shed over a cent to push GBP/USD briefly below the $1.49 level this morn¬ing, and sterling dropped below the 1.10 level on the euro. These are great levels for sterling buyers, but its not looking so good for the majority who are sellers of the UK currency. We have seen Voltrex clients use their online platform access—VFX—and entering ‘Limit Orders’ to try to catch a rally during general trading moves, and also ‘Up + Down Alerts’, which can text them on a move in their favour. Data 09.30: Industrial Production.

Euro:

The euro is higher against the pound this morning as the UK’s own debt problems continue to follow the currency and drag it down, just as the debt shadow has courted some eurozone countries. While temporary swings in risk appetite will continue to benefit the euro, the common currency is vulnerable because of concerns about the sovereign debt of several eurozone countries. On a macro view, traders are still extremely wary about the euro itself. Yesterday we saw Portugal being highlighted alongside the UK with its worrying levels of debt. Portugal's gradual approach to fiscal consolidation is a “concern” and insufficient consolidation could trigger a downgrade of its AA rating, Fitch ratings said after putting Portugal’s AA rating on negative watch last Septem¬ber. The euro fell against the dollar as players became a bit weary about the level of risk taken on board earlier in the week. This pushed the single currency down half a cent to leave EUR/USD closer to the $1.3550 levels.
No major data.

General:

• As commodities continue their rally, helped by decent trading figures out of China, the Aussie dollar has made more inroads against an under-fire pound.

• China’s foreign trade showed huge growth in February. Exports in Feb stood at 94.52 billion US dollars, up 45.7%, in a new indication of a rebound in global demand, while imports rose 44.7%.

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GBP/USD	1.4941
GBP/EUR	1.1007
EUR/USD	1.3577
GBP/JPY	134.81
GBP/AUD	1.6310
GBP/NZD	2.1181
GBP/ZAR	11.0731
GBP/CHF	1.6075
GBP/CAD	1.5336
GBP/SGD	2.0887
GBP/THB	48.72
GBP/HKD	11.5915 red-down; blue-up (snap shot