US Dollar:
US stocks climbed Friday as a better than expected jobs report for August helped the market snap a three week losing streak. In the last two weeks or so things have been starting to firm up, and the jobs numbers really put an exclamation mark on that. The Dow Jones and the FTSE 100 are already up over 4% for September as the bulls make hay while the sun shines. The view is of a feeling of being a lot more comfortable of the view than those thinking of a double dip. Friday's news that the US payrolls shrank by a smaller than expected 54k jobs in August has encouraged a view of the US economy that’s neither glass half full nor glass half empty. That spells bad news for the dollar because it reduces the need for currency safe harbours like the greenback, but neither is there much chance of it getting a boost from robust US growth, a fact also confirmed Friday by a weak August report on the non-manufacturing sector. The figures show that concerns about a double dip had gotten far ahead of the economic cycle. That is encouraging demand for yield and flows into equity markets, which carries a negative correlation with the dollar. US and Canadian markets shut for national bank holiday (Labor day
Pound:
Cable saw a move higher by a cent and a half from Thursdays lows as the US nonfarm payrolls num-bers saw stock markets move higher and push flows out of the greenback and into what are perceived as more riskier currencies such as sterling. This saw the pound push towards the high $1.54 level and target the $1.55 mark. It was not all plain sailing for the pound however as a report showed UK job vacancies declined, knocking confidence in the UK market. Industries including engineering, manufacturing, financial services, training and IT all suffered a drop in the number of jobs available in August compared to July, according to Reed jobs Index. This saw the pound give up its grip against the euro, as GBP/EUR fell below the 1.20 level, the first time in four weeks. The pound also suffered against its European cousin as more euro buying as appose to purchasing of sterling took place on the back of the recent stock market rally.
Data: Nothing today my friends, BRC Retail Sales monitor just after midnight.
Euro:
The euro has been well supported by a more confident mood for stocks as the yen and dollar were sold off to the benefit of the single currency. This saw the euro put a couple of cents against the greenback since the end of last week, with the $1.29 level being broken for the first time in three weeks. This equity move also saw the euro move ahead of the pound, despite the UK currency also benefitting from the move out of lower yielding currencies and into the euro and sterling. EUR/GBP has now moved towards the 0.8350 level, close to a four week high for the single unit. Meanwhile, investors increased their bets against the euro for the third week in a row, according to data released Friday. Net speculative bets against the euro were at 25,600 with a value of $4.2 billion in the week ended Tuesday, compared with the previous weeks data that showed 21,600 net short contracts with a value of $3.6 billion. A sign that the euro could easily fall out of favour with investors and take another hit should the debt worry story on certain southern European states come back to haunt the single unit.
Data 09.30: E/Zone Sentix Investor Confidence expected 8.7 from 8.2
General:
• The Weekend earthquake in Christchurch had only a brief effect on the New Zealand dollar which dipped initially, but has since recovered to trade higher. Bank of New Zealand foreign exchange strategist Mike Jones said the earth¬quake will result in a lot of government spending with increased construction activity coming through, if anything, that is probably growth and inflation positive, helping the value of the Kiwi dollar lift higher.
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| GBP/USD | 1.5460 |
| GBP/EUR | 1.1980 |
| EUR/USD | 1.2905 |
| GBP/JPY | 130.10 |
| GBP/AUD | 1.6860 |
| GBP/NZD | 2.1340 |
| GBP/ZAR | 11.1120 |
| GBP/CHF | 1.5784 |
| GBP/CAD | 1.6044 |
| GBP/SGD | 2.0768 |
| GBP/THB | 48.12 |
| GBP/HKD | 12.0124 red-down; blue-up (snap shot) |
For more information or to get the latest spot rates contact:
John Paul Georgiou
Senior Foreign Exchange Broker
\n John.georgiou@voltrexfx.com