US Dollar:
Markets fell Wednesday as a report from the Federal Reserve pointed to signs that the economic recovery may be running out of steam. Weaker than expected US durable goods data dented stocks further. Durable goods orders fell 1% in June, while consensus estimates forecast a 0.7% advance. The selling today is being driven by a focus on US interest rates and expectations they could fall further if share markets stay weak. This all led to a continued sell off in the greenback against the majors. You’ve got this kind of growing chorus of voices pointing to the possibility the US could dip into another recession. Worries over the US economy taking a downturn are weighing on the dollar. A gloomy reading on the US economy from the Federal Reserve in its latest Beige book, a report on economic conditions released before its next policy meeting also helped drag the dollar down. The Fed highlighted the slowing pace of recovery and a cautious consumer.
Data 13.30: Unemployment Claims 457k from 464k
Markets fell Wednesday as a report from the Federal Reserve pointed to signs that the economic recovery may be running out of steam. Weaker than expected US durable goods data dented stocks further. Durable goods orders fell 1% in June, while consensus estimates forecast a 0.7% advance. The selling today is being driven by a focus on US interest rates and expectations they could fall further if share markets stay weak. This all led to a continued sell off in the greenback against the majors. You’ve got this kind of growing chorus of voices pointing to the possibility the US could dip into another recession. Worries over the US economy taking a downturn are weighing on the dollar. A gloomy reading on the US economy from the Federal Reserve in its latest Beige book, a report on economic conditions released before its next policy meeting also helped drag the dollar down. The Fed highlighted the slowing pace of recovery and a cautious consumer.
Data 13.30: Unemployment Claims 457k from 464k
Pound:
Sterling continued its impressive march against the dollar yesterday as cable breached the $1.56 level, touching its highest level since February after trading at $1.5653 this morning. This was despite the comments by Bank of England Governor Mervyn King signalling the central bank is in no hurry to raise interest rates as he warned several risks remained to the recovery and that there was no talk of “applying the brakes” yet. The main reason for sterling's impressive move higher against the dollar was due to risk sentiment improving in global markets over the last few weeks and also a sell off in the value of the greenback after recent economic data released in the US pointed towards a possible downturn in the US economy. The pound has managed to keep its grip on the euro and still trading around the 1.20 level. Both currencies have benefitted from the drop in the value of the dollar and subsequently GBP/EUR has stayed trading in ranges.
Data already out: Nationwide HPI came in under expectations at –0.5%
Euro:
Economic data surprises have swung sharply in favour of the euro in recent weeks. That has been one of the factors behind the euros recovery, from its early June touch below $1.19, the euros lowest level in more than four years. We have now seen the $1.30 level consistently breached over the last few days, with some analysts targeting the $1.35 mark in the short term. Against the pound we have seen each currency cancel the other out as EUR/GBP have both benefitted from a gain in risk appetite and a fall in the greenback. Today investors will be eyeing German unemployment figures at 09.00 and eurozone indicators at 10.00. Germany's unemployment rate is set to have fallen, in line with other anecdotal evidence. Eurozne business confidence data is also due next week and is to follow other surveys higher although only a mild improvement is forecast for the whole re¬gion.
Data 09.00: German unemployment –18k from –21k
Sterling continued its impressive march against the dollar yesterday as cable breached the $1.56 level, touching its highest level since February after trading at $1.5653 this morning. This was despite the comments by Bank of England Governor Mervyn King signalling the central bank is in no hurry to raise interest rates as he warned several risks remained to the recovery and that there was no talk of “applying the brakes” yet. The main reason for sterling's impressive move higher against the dollar was due to risk sentiment improving in global markets over the last few weeks and also a sell off in the value of the greenback after recent economic data released in the US pointed towards a possible downturn in the US economy. The pound has managed to keep its grip on the euro and still trading around the 1.20 level. Both currencies have benefitted from the drop in the value of the dollar and subsequently GBP/EUR has stayed trading in ranges.
Data already out: Nationwide HPI came in under expectations at –0.5%
Euro:
Economic data surprises have swung sharply in favour of the euro in recent weeks. That has been one of the factors behind the euros recovery, from its early June touch below $1.19, the euros lowest level in more than four years. We have now seen the $1.30 level consistently breached over the last few days, with some analysts targeting the $1.35 mark in the short term. Against the pound we have seen each currency cancel the other out as EUR/GBP have both benefitted from a gain in risk appetite and a fall in the greenback. Today investors will be eyeing German unemployment figures at 09.00 and eurozone indicators at 10.00. Germany's unemployment rate is set to have fallen, in line with other anecdotal evidence. Eurozne business confidence data is also due next week and is to follow other surveys higher although only a mild improvement is forecast for the whole re¬gion.
Data 09.00: German unemployment –18k from –21k
General:
• The Reserve Bank of New Zealand has hiked interest rates by 25 basis points to 3% and accompanied it with decidedly downbeat comments about the economy.
• The Reserve Bank of New Zealand has hiked interest rates by 25 basis points to 3% and accompanied it with decidedly downbeat comments about the economy.
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| GBP/USD | 1.5523 |
| GBP/EUR | 1.2001 |
| EUR/USD | 1.3031 |
| GBP/JPY | 136.43 |
| GBP/AUD | 1.7369 |
| GBP/NZD | 2.1543 |
| GBP/ZAR | 11.4401 |
| GBP/CHF | 1.6467 |
| GBP/CAD | 1.6169 |
| GBP/SGD | 2.1328 |
| GBP/THB | 50.34 |
| GBP/HKD | 12.1361 red-down; blue-up (snap shot) |
These rates are for indication purposes
For more information or to get the latest spot rates contact:
John Paul Georgiou
Senior Foreign Exchange Broker