US Dollar:
The greenback remained torn yesterday between acting as a safe haven from the potential global double dip in growth and the US’s own structural problems. Given the ongoing concerns regarding the state of the G20 economies we would expect the USD to making good head way but it appears to be increasing difficult for the Dollar to advance. This leads us to believe that the Dollars own problems which some will argue are far more significant than other players will eventually come to the surface and the massive Dollar rally we have seen since the beginning of the credit crunch will come to an end. Of course this view could alter should the Euro Zone suffer a sovereign debt crisis that leads to the breakup of the Euro Zone. Coming today’s events, the eco¬nomic docket for the US is relatively light. That being said, both the ICSC Chain Store Sales reading for June and consumer credit report for May are meaningful indicators gauging consumer spending, the foundation for economic activity in the US.
DATA— ICSC Chain Store Sales, Consumer Credit
Pound:
Today’s focus for GBP will be firmly on the Bank of England monetary policy meeting. Although markets are not expecting any material change in either the base rate or the Banks Quantitative easing policy, there could be a split emerging in the banks view of the British Economy. During last month’s meeting, one member, Andrew Sentence voted to raise rates to fend off the current bout of stubborn inflation, but the other seven members voted to keep on hold. We will have to wait for two weeks until the Minutes of today meeting is released and further talk of a rate raise will propel Sterling up the pecking order. The pound has enjoyed a good run over the last month and is currency holding around 1.20 against the euro and is targeting 1.52 against the USD.
DATA – BOE Rate decision
Euro:
It seems conditions continue to improve in Europe with the major risk of the sovereign debt market appearing to subside if only in the near term. Germany, Portugal and Spain all held successful auctions of their national debt showing that the markets are not completely void of confidence in the European financial system. The ability for these governments to raise capital is essential to their ability to fund the countries balance sheet. However, this should not be taken as evidence that conditions have definitively improved. Speculative interests have a lot to do with this success and sentiment can quickly change. For today, the major release will be the ECB’s interest rate decision but this may prove to be a non-event, That said, traders will pay close attention to any announce¬ments and in particular any change to ECB’s huge liquidity operations designed to support the European bank¬ing system. Any extension of lending operations could shake the markets confidence and further rock the Euro.
DATA—ECB Rate decision
General:
Barclays shares jump as investors chew over idea of a break up. Fresh calls for Barclays to be broken up have surfaced, lifting the lender's shares 15pc this week on forecasts that the business would be worth more as sepa¬rate retail and investment banks.
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| GBP/USD | 1.5160 |
| GBP/EUR | 1.1985 |
| EUR/USD | 1.2654 |
| GBP/JPY | 133.75 |
| GBP/AUD | 1.7838 |
| GBP/NZD | 2.1434 |
| GBP/ZAR | 11.4853 |
| GBP/CHF | 1.5981 |
| GBP/CAD | 1.5858 |
| GBP/SGD | 2.0962 |
| GBP/THB | 48.89 |
| GBP/HKD | 11.81 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