US Dollar:
Yesterday saw range trading for the dollar as traders remained unconvinced as to which way to push the market but it does seem the market is continuing to react a lot more rationally to news coming from Europe. Global risk appetite will remain fragile but not collapse although we have seen a move in the dollars favour this morning against both the euro and the pound. The greenback took an eye watering two cents off sterling after the UK government said it will scrap the FSA and BP pulled their dividend pay out. This saw the buck rally and the dol¬lar saw a two cent swing back in its favour, trading at $1.4650. We also saw a move back into the dollar against the euro after Spain was rumoured to have a need to tap the EU’s rescue fund. Not as dramatic a move as to what we saw in cable, but still a cent gained as EUR/USD traded at $1.2244. Data 13.30: Core CPI m/m ex¬pected 0.1% from 0.0%, Unemployment Claims 452k from 456k & CPI m/m –0.2% from –0.1%.15.00:
Pound:
The pound was lower against the dollar, weighed down by the UK governments announcement Wednesday of a shake up of the country’s bank regulatory system, as it raised worries about tighter regulation for the sector. The pound was also hurt by news of BP’s decision to put $20 billion in escrow to manage the oil spill damage claims, even though the news had been well flagged and payments to the fund would be spread out over more than three years. BP also said it wont issue further dividends this year. Cable has now dumped two cents to leave GBP/USD trading at $1.4658 from where its was trading yesterday afternoon at $1.4856. Sterling also took a hit against the euro, despite the single currency coming under its own pressure as a story regarding Spain tapping the EU for funds dragged the euro down against other currencies. The pound fell a cent on the single unit for GBP/EUR to trade at 1.1956. Looking forward to today, the focus will be on UK retail sales and the CBI indus¬trial trends survey. Data 09.30: Retail Sales m/m expected 0.1% from 0.3%. 11.00: CBI Industrial order ex¬pectations expected at –15 from –18.
Euro:
The euro was little changed yesterday but this morning has seen a move in different directions against the dollar and sterling. Against the buck we saw a fall of around a cent to push EUR/USD down to $1.2263. Al-though optimism over the economic recovery has tempered the declines for the euro, we have now seen a move lower again for the single currency amid renewed concerns about the eurozone debt crises after reports Spain might have to tap the EU’s rescue fund. Eurozone sovereign-credit concerns are checking the euros re-cent advance and perhaps suggesting that the rally may struggle to extend much more. Against the pound we saw an ugly contest, as despite the Spanish story dragging down the euro in general, we saw the single cur-rency rise against sterling after the UK wrestled with its own demons. Looking ahead, analysts at Bank of New York Mellon are seeing market participants acting to protect themselves against euro losses, both corporate and funds. Euro sellers are just biding their time and the single currency should soon reverse its path to reach $1.15 by September and $1.10 by the end of the year against the dollar.
No major data. Speaker 13.00: Buba President Weber
General:
• The Swiss National Bank holds its quarterly policy review today, and while its is widely expected to keep its 3-month Swiss franc Libor target band unchanged at 0% to 0.75%, market interest will focus on any comments about the Swiss franc.
For more information or to request a call back click here
| GBP/USD | 1.4687 |
| GBP/EUR | 1.1965 |
| EUR/USD | 1.2280 |
| GBP/JPY | 133.89 |
| GBP/AUD | 1.7055 |
| GBP/NZD | 2.1063 |
| GBP/ZAR | 11.1603 |
| GBP/CHF | 1.6516 |
| GBP/CAD | 1.5098 |
| GBP/SGD | 2.0510 |
| GBP/THB | 47.59 |
| GBP/HKD | 11.4404 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