US Dollar:
The dollars recent rally has finally come off the boil, for now anyway as equity markets recoup some of their recent losses to push the greenback lower across the board. Equity markets were up by 1% on average as risk returned to see funds flow from the safe haven currencies such as the dollar and yen and into the euro and ster¬ling. The dollar has now fallen for its eighth consecutive day against the euro and hits its lowest point against the common currency of 1.2350—a two week low after hitting a four year high of $1.1875. A similar picture al¬though not as dramatic, was seen in the value of the buck against sterling as we saw over a cent gained from yesterday in the pounds favour. This saw the dollar fall to its lowest level in four weeks against the UK currency as GBP/USD hit $1.4830. As we have seen over the last few months, the dollar will likely remain poised for a move higher on the back of a disappearance of risk from the markets which could happen at any point. Today we have plenty of data due which may have an effect on the currency markets, kicking off with Building permits and PPI numbers due at 13.30. Data 13.30: Building Permits expected at 0.63M from 0.61M & PPI m/m at –0.5% from –0.1%. Speaker 22.45: Fed Chairman Ben Bernanke.
Pound:
Sterling saw a decent rally against the dollar yesterday despite economic data which may have pulled the pound lower. The CPI data which was released saw inflation data fall back from 17-month highs in May, easing from 3.7% to 3.4% last month—slightly below the 3.5% expected by the city. This saw pressure taken of the recent worries about interest rate rises, which generally would see a move higher in the value of that cur¬rency. Sterling’s move higher against the dollar was on the back of a rise in risk appetite as the dollar dropped across the board. We saw GBP/USD recover from May’s lows of $1.4225 to fall just short of a five week high of $1.4836. The pounds position against the euro was little changed but the fall in the value of the dollar did lean towards the single currency a little more than sterling. GBP/EUR traded around the 1.20 levels, against despite weaker than expected economic data from Germany, which would have normally seen a slight dip in the euros value. UK Consumer confidence fell significantly in May to 65 after hitting a two-year high in February.
Data 09.30: Claimant Count Change expected –23.2k from –27.1k & Average Earnings Index 3m/y ex-pected 4.4% from 4.0%. Speaker 22.45: BoE Gov King.
Euro:
A small breather for the euro yesterday saw the single currency rally against both the dollar and to a lesser extent the pound. Despite a weaker than expected ZEW figure from Germany, which fell 17.1 points to 28.7, undershooting the forecast survey median of 42.8, which would of normally dragging down the value of the single currency, the euro made ground on a sell off in the value of the greenback. This came as equity markets moved higher, first in Europe, then in the States and finally in Asia as risk appetite returned. EUR/USD has had a good last week posting consecutive gains over the last eight days and has now recovered to a two week high of $1.2350. Against the pound there was a slight pull back in the euros favour as a combination of a risk appe¬tite surge and inflation data in the UK falling back helping EUR/GBP rise to 0.8333 from 0.8298. ,
Data 10.00: CPI y/y expected 1.6% unchanged.
General:
• Gold is holding steady at $1,234 per troy ounce.
• Oil made gains overnight which are being held onto for the black gold to trade at $77.00 per barrel
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| GBP/USD | 1.4770 |
| GBP/EUR | 1.2032 |
| EUR/USD | 1.2284 |
| GBP/JPY | 135.40 |
| GBP/AUD | 1.7134 |
| GBP/NZD | 2.1277 |
| GBP/ZAR | 11.2337 |
| GBP/CHF | 1.6715 |
| GBP/CAD | 1.5205 |
| GBP/SGD | 2.0617 |
| GBP/THB | 47.87 |
| GBP/HKD | 11.5137 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