US Dollar:
We have moved in the fundamental low point of the week. After two days of heavy scheduled event risk, the economic docket looks to thin out until Friday’s fireworks. What does this mean for dollar? A lack of predictable and remarkable event risk lowers the expectation for short-term volatility and probability for a meaningful push in underlying sentiment to be founded on the basis of an indicator. Furthermore, the dollar and its risky counter¬parts will be caught in the gravity of Friday’s nonfarm payrolls release and the start of the G-20 meeting in South Korea. More often than not, the capital markets will refrain from trend developments before major event risk. And, for those instances of significant price developments in the run up to major events like these, the push is usually made in such a way that it would have the less consequence for dominant trends.
DATA : ISM Non-manufacturing PMI and Unemployment claims
Pound:
Another currency that is fundamentally depressed and should have theoretically appreciated with a boost in underlying risk, the British pound was otherwise preoccupied by the Bank of England’s annual report. For any bulls that were banking on the MPC following the Organisation for Economic Co-operation and Development’s advice and moving sooner rather than later on tightening monetary policy, the statement tempered rate specula¬tion by suggesting the economy would struggle to meet the bank’s 2 percent inflation target over the medium term. With commentary like this, official’s are clearly unconvinced of the permanence of the recent 3.7 percent CPI reading. Adding to this disappointment, net consumer credit slipped 0.1 billion pounds in April.
DATA : Nationwide HPI and Services PMI
Euro:
No news is not good news for the euro. Already under considerable strain by a market that is sceptical over the region’s ability to avoid a double dip recession, financial crisis and even a possible fragmentation of the rela¬tively new monetary union; investors need some sort of promise to reinvest their capital in the unbalanced econ¬omy. Making matters worse Wednesday, news that Iran is looking to unload 45 billion euros from its reserves further diminishes the single currency’s ability to elicit confidence. Just a short-time ago, China was taken to task to refute rumours that it was considering diversifying away from European assets. And, while Iran is not the investor that China is, the continued speculation and fear that long-term and deep-pocketed investors are start¬ing to give up on the euro further wears on the speculative crowd that is only concerned about short-term gain and loss. At the root of the problem, the financial uncertainties for the economy continued today. Attempting to fill its budget deficit, Greece announced plans to sell off its stakes in railway and water companies as well as the post office. This collective unloading is expected to pull in 3 billion euros. Less promising, Spain’s consumer confidence report was released with the biggest monthly drop on record following civil wage cuts and a freeze on pensions. With approximately 38 billion in debt coming due next month, Spain is being watched.
DATA : Retail sales
General:
• The Canadian dollar continues to outperform its higher yielding Australian and New Zealand counter¬parts. It seems speculators are willing to overlook the diminished forecast for interest rate hikes…or per¬haps they are waiting for evidence to force the central banks’ hand.
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| GBP/USD | 1.4712 |
| GBP/EUR | 1.1958 |
| EUR/USD | 1.2304 |
| GBP/JPY | 136.03 |
| GBP/AUD | 1.7333 |
| GBP/NZD | 2.1428 |
| GBP/ZAR | 11.2088 |
| GBP/CHF | 1.6941 |
| GBP/CAD | 1.5243 |
| GBP/SGD | 2.0613 |
| GBP/THB | 47.43 |
| GBP/HKD | 11.459 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
\n john.georgiou@voltrexfx.com