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Australian central bank chief signals further rate hikes—Aussie may rally

US Dollar:
The Dow Jones hit an 18-month closing high as risk continued to flow through global markets, which in turn saw the dollar lose some of its sparkle. As investors took on more risk, the dollar was sold against its major rivals which saw the buck give up over a cent to sterling, pushing GBP/USD back over the $1.50 level, and over a cent on the euro, which in turn was boosted by the market taking stock from the recent Greek aid package, which saw EUR/USD trade over the $1.35 level. Friday’s US labor data will have a big bearing on whether the markets can get another leg up, with most analysts forecasting nonfarm payrolls to have added 200k jobs, com¬pared with 36k losses in February. Be careful though, as the UK has a national holiday this Friday, so any move in the pounds favour may not be available, unless you have access to our online currency payments service—VFX (Voltrex Online Payments). Data 14.00: S&P/CS Composite-20 HPI YoY expected –0.6% from –3.1%. 15.00: CD Consumer Confidence expected 50.1 from 46.0.     

Pound: The pound seemed to have taken a back seat in the markets yesterday, happily taking advantage of growing risk which saw cable fly through the 1.50 level, whilst trading sideways against a rallying euro as the single currency moved higher on the Greek aid package and bond buying. Global stock markets continued to rise, the dollar fell and other currencies traded higher on this. We saw GBP/USD move from $1.4881 to come close to the $1.5050 level this morning, but be aware, as traders will be keeping a close eye on Friday’s non-farm payrolls which will have an effect on cable. Also be aware that even though Voltrex will be closed for busi¬ness on Friday, out clients can still access the currency markets via VFX—our online currency payments plat¬form. (You can apply for this free of charge by email if you wish this to be set up before the end of the week). The pounds move against the euro has been muted, as both currencies seem to be cancelling each others moves out, whether it be up or down. The Greek bond sale helped the euro yesterday, but sterling managed to keep in a tight range around the 1.11 level, and it expected to remain in narrow ranges throughout today.
Data already out: Nationwide HPI MoM 0.7% – better than expected. Data due 09.30: Final GDP expected 0.3% unchanged, Current Account expected –4.6B from –4.7B. Speakers 09.45: Chancellor Darling.

The euro is little changed against sterling Tuesday, after it advanced Monday against the dollar as a new debt offering by Greece eased investors worries over the country’s short term funding gap. The euro in particular enjoyed continued strength as short-covering in the wake of the European Union and the International Monetary Fund backstop for Greece which reduced some near-term risk of a Greek debt default. Despite Greece’s suc¬cessful bond offering, the euro still faces significant hurdles. The euros move higher against the dollar is likely to prove to be temporary. Against sterling, its just looks a straight forward ugly contest, with each currency trading blow for blow in how bad it can make itself look.  Data: Nada.

• The Australian central bank chief has signalled for further rate hikes, which in turn could see the Aussie dollar continue its recent rise against its major rivals.

• Oil prices ticked higher Tuesday morning ahead of a weekly report on US energy stockpiles, now trading at $82.24 per barrel.


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GBP/USD 1.5050
GBP/EUR 1.1166
EUR/USD 1.3514
GBP/JPY 139.41
GBP/AUD 1.6378
GBP/NZD 2.1163
GBP/ZAR 11.1423
GBP/CHF 1.5971
GBP/CAD 1.5340
GBP/SGD 2.1066
GBP/THB 48.63
GBP/HKD 11.6926 red-down; blue-up (snap shot)

These rates are for indication purposes only.

For more information or to get the latest spot rates contact:

John Paul Georgiou
Senior Foreign Exchange Broker
+44 (0)20 7959 6851