US Dollar:
Traders are at present willing to take on more risk now the bank stress tests are out of the way, and more earn-ings report due this week. The dollar has nosedived as players dump the safe haven greenback and purchase more riskier assets, moving the euro and pound higher against the greenback. Q2 results for banks (UBS and DB next up) will dictate the mood. Wall Street futures are edging lower Tuesday after markets gained on Mon-day as housing data enthused investors. The closing level for the S + P was particularly important as its sig-nalled a move above the 200-day moving average—a sign many bulls have been advocating as a catalysts for fresh money to come into the market. The safe haven dollar dipped to its lowest level since early May against a basket of its competitors as US stocks rallied and demand increased for higher-yielding currencies.
Data 15.00: CB Consumer Confidence 51.3 from 52.9.
Pound:
Traders are at present willing to take on more risk now the bank stress tests are out of the way, and more earn-ings report due this week. The dollar has nosedived as players dump the safe haven greenback and purchase more riskier assets, moving the euro and pound higher against the greenback. Q2 results for banks (UBS and DB next up) will dictate the mood. Wall Street futures are edging lower Tuesday after markets gained on Mon-day as housing data enthused investors. The closing level for the S + P was particularly important as its sig-nalled a move above the 200-day moving average—a sign many bulls have been advocating as a catalysts for fresh money to come into the market. The safe haven dollar dipped to its lowest level since early May against a basket of its competitors as US stocks rallied and demand increased for higher-yielding currencies.
Data 15.00: CB Consumer Confidence 51.3 from 52.9.
Pound:
Sterling has continued its impressive rally against the greenback as European currencies benefit from a sell off in the safe haven currencies such as the dollar and yen. The $1.55 level has been broken and a five month high of $1.5528 was posted this morning, although cable has dipped down slightly since then. We are seeing risk appetite remain buoyant still as global equity markets traded higher on renewed optimism. Against the euro there was a slight move lower as traders moved back into the single currency, which did lose more ground against its rival currencies compared to the pound. We have seen sideways trading against the euro this morning. Sterling has traded lower against the Aussie and Kiwi dollars and Rand as the higher yielding curren¬cies trade higher across the board. In the UK, growth is expected to slow in coming quarters and the Bank of England looks unlikely to tighten policy anytime soon. The market had needed a sell off and we got one on Fri¬day after the GDP surprise. However, and interest rate hike is still unlikely before the middle of next year given that the economy will likely slow from here on.
Data 11.00: CBI Realized Sales expected at 2 from –5
Data 11.00: CBI Realized Sales expected at 2 from –5
Euro:
The euro continues to gain, though at a slower pace, after risk appetite picked up once the bank stress tests came out. Concerns that the tests might have lacked enough rigor appeared to subside, while positive economic data from the US and Europe supported riskier assets, buoying the euro an impressive cent gain over its US counterpart to trade above the $1.30 level. Against sterling it was a case of as you were as both curren¬cies benefitted from a gain in risk appetite. Investors who had been nervous over the eurozone sovereign debt crises dipped back into the euro. Publication of the tests brought many critics to the fore. Their main argument was based on the assumption that the test had been too easy and therefore did not provide a real indication of the situation of the financial sector. The markets are obviously not sharing this concern: at prices above $1.29, the euro seems strong. After all, the main test scenarios had been known for some time and as a result the overall positive outcome supports the euro.
No major data.
No major data.
General:
• Commodity-based currencies such as the Australian & New Zealand dollars and the South African Rand rallied yesterday as investors dipped back into the higher yielding currencies after the European bank stress tests were out of the way.
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| GBP/USD | 1.5482 |
| GBP/EUR | 1.1929 |
| EUR/USD | 1.2981 |
| GBP/JPY | 134.95 |
| GBP/AUD | 1.7171 |
| GBP/NZD | 2.1101 |
| GBP/ZAR | 11.633 |
| GBP/CHF | 1.5961 |
| GBP/CAD | 1.501 |
| GBP/SGD | 2.1100 |
| GBP/THB | 49.79 |
| GBP/HKD | 12.0221 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