US Dollar:
Currency markets traded in extremely tight ranges yesterday, mainly down to a national holiday in the US which saw most players refrain from entering new positions in a very illiquid market. This put a block on the freefall of the dollar which had seen the buck drop against the majors over the last few days. The greenback remained trading in between $1.25—$1.26 against the euro throughout most of yesterday, and $1.51—$1.52 against ster¬ling. Market participants are now focusing on US data to be released later this week as well as the start of the corporate reporting season. The most important indicator this week will be the ISM index of IS non-manufacturing activity for June. Analysts said it should be slightly weaker than the previous month but still in-dicative of growth. Markets focus will continue to be concerned about the global recovery for direction in curren¬cies. Data 15.00: ISM Non-Manufacturing PMI expected 55.1 from 55.4
Pound: A very quiet day in the markets with extraordinarily thin trading, affected massively by the US holiday saw little buying. The lack of trading was also affected by the general malaise over northern hemisphere growth concerns. Sterling did fall slightly against the yen and dollar as Asian traders sold GBP/JPY on a report in the UK’s Times newspaper that the government there was drawing up contingency plans for a possible collapse of global oil company BP, a senior trader at a major Tokyo bank. A small recovery in early European trade has seen cable fight back to test the $1.52 level this morning. Against the single currency we have seen very tight range trading with 1.20 on the downside and 1.21 on the up side. UK economic growth strengthened in the sec¬ond quarter, but a lacklustre recovery in the key services sector is heightening the risk of a setback , data from the British Chambers of Commerce overnight showed.
Data: Nationwide Consumer Confidence expected 64 from 65.
Euro:
The euro’s retreat from its high around $1.26 Friday after the soft US jobs data reflects investors lack of comfort with the euro in that area. Even in the absence of any further data or events it drifted down to below the $1.2550 level. The market is concerned that $.126 is not reflective of the ongoing concerns in Europe. The common cur¬rency looks prone to further weakness, although selling of the currency is not likely to be as aggressive as it was earlier in the year. The single currency is at the top of its range traded against the dollar yesterday, trying to break through the $1.26 level. No major data.
General:
• The Reserve Bank of Australia left its interest rates unchanged at 4.50% for a second month in a row Tuesday, likely remaining on the sidelines to await second-quarter inflation data at the end of July. The on-hold decision was widely expected.
• The yen is modestly higher against both the US dollar and euro, spurred by news China has increased its purchases of Japanese government bonds, traders said.
• A report in the Times Tuesday said the UK government is making contingency plans for a possible col¬lapse of BP PLC as worries grow over the Gulf of Mexico oil spill. The report, which didn’t directly cite sources, said talks led by Department for Business and Treasury officials reflect growing concern about the implications of a corporate failure of BP.
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| GBP/USD | 1.5091 |
| GBP/EUR | 1.2080 |
| EUR/USD | 1.2595 |
| GBP/JPY | 133.34 |
| GBP/AUD | 1.7902 |
| GBP/NZD | 2.1879 |
| GBP/ZAR | 11.7132 |
| GBP/CHF | 1.6143 |
| GBP/CAD | 1.6115 |
| GBP/SGD | 2.1117 |
| GBP/THB | 49.26 |
| GBP/HKD | 11.8462 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