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Obama confirms both parties have agreed to raise US debt limit

Pound: Sterling hit a two month high versus the dollar on Friday and has managed to hold onto most of those gains going into the UK’s morning trading session. The main reason for the rally in cable, as if there is anyone out there who has managed to avoid the latest news, the will they wont they saga of the US raising there bor-rowing which has pushed the dollar lower over the last week or so. Friday saw a cent gain alone for sterling as markets became worried that the debt limit may not be raised before the deadline of tomorrow, and despite the US president confirming both parties have agreed to raise the debt limit, there is still a concern it wont be rati¬fied. Once it does get passed, we may see the pound give up some gains as things aren’t exactly looking rosy in the UK’s own back  yard. The Confederation of British Industry (CBI) warns today that there is a darkening mood among British business people as they face up to years of lacklustre, disappointing and fragile economic growth. Versus the euro we have seen the pound hit a two week high at 1.1447 as the single currency has also been on the back foot. The worries of contagion to Italy and Spain are keeping the euro under pressure, which
you can read more on below.  Data 09.30: Manufacturing PMI 51.1 from 51.3.

 

Euro: Same old same old for the euro as we go into another week with the threat of debt levels spiralling out of control and contagion spreading to more major trading countries in the eurozone such as Spain and Italy. Investor con¬cerns over Italy and Spain are complicating efforts to deliver Greece its next tranche of rescue aid, underscoring the increasing difficulty Europe faces in reining in its ongoing debt crises. The single unit fell against sterling as we went through the 0.8750 level, with international investors shunning the euro. There was a slightly different picture in the value of EUR/USD, as the greenback came under pressure in the run up to tomorrows deadline for the US to raise its borrowing limit, seeing the euro gain a cent in the wake of uncertainty
Data: 10.00: EUR Unemployment Rate 9.9% unchanged.

 

Dollar: Financial markets as expected will be highly volatile today after US President Obama and congressional leaders Sunday night sealed a deal to raise the federal debt limit that includes sharp spending cuts but no new taxes, breaking a partisan impasse that has driven the nation to the brink of a government default. As last week showed, the dollar took a hit against the majors in the run up to the decision which has to be passed by Midnight tomorrow (Aug 2nd). The agreement brings to an end a self-created crises that has consumed Washington, rattled Wall Street and shaken confidence in the American political system at home on abroad. Passage of the agreement however, remains far from certain in the House, where sceptical republicans were just beginning to digest the crises. The dollar gave up ground on both the euro and pound. Weaker than expected US GDP num¬bers on Friday didn’t help matters either, as combined with the crises in Washington, helped push the buck lower across the board. One of the reasons why this has moved the dollar so much against other currencies; the dollar represent 60.7% of the worlds currency reserves, compared with the 26.6% for the euro, which has the next biggest portion.  Data 15.00: ISM Manufacturing PMI  55 from 55.3.

 

General:
• Gold has slipped down slightly today after hitting a record high of $1,632.90 on Friday.
• Britain’s leading business lobby group deals a blow to Milliband and argues that a VAT cut would be very expensive.

 

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GBP/USD                        1.6429

GBP/EUR                        1.1420

EUR/USD                        1.4388

GBP/JPY                         127.40

GBP/AUD                        1.4870

GBP/NZD                         1.8620

GBP/ZAR                         10.9229

GBP/CHF                         1.3039

GBP/CAD                        1.5615

GBP/SGD                        1.9734

GBP/THB                         48.75

GBP/HKD                        12.8041

red-down; blue-up (snap shot)

These rates are for indication purposes only.

 

For more information or to get the latest spot rates contact:

John Paul Georgiou

Senior Foreign Exchange Broker

+44 (0) 20 7959 6917      

Website:

For more information 

www.voltrexfx.com

 

 

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