US Dollar:
The dollar was mixed yesterday as gains against sterling were seen but the single currency continued its recent rally against the greenback. US stocks closed with modest gains after upbeat earnings from companies includ¬ing Halliburton outweighed weaker house building data. However, after hours reports from IBM and Texas In¬struments missed revenue expectations. The housing data report came in at 14, slightly under the higher figure of 16 which was expected. Markets are in a trading range at present, waiting for confirmation from some of these blue-chip companies to meet or beat expectations. Johnson & Johnson and Goldman Sachs release re¬ports today. Data 13.30: Building Permits expected 0.57M unchanged & Housing Starts 0.58M from 0.59M. Speakers 15.00: FOMC Member Tarullo speaks.
Pound:
Sterling was a mere back seat passenger yesterday as the euro continued its rise against the majors and a gain for the dollar also saw the pound fall across the board. Traders will look for direction of the UK cur-rency when fresh data on public borrowing, released today, will gauge progress in curbing deficits. Selling could occur if the euro reverses. At 09.30 & 10.00 this morning sees the release of UK public finances and CBI indus¬trial trends. Public finance numbers will likely show a higher level of borrowing for the first time in several months when compared with a year earlier. This month may look a little worse. Cable gave up over a cent yes¬terday as we saw GBP/USD fall to test the $1.52 level, but a decent recovery this morning has seen over half a cent taken back from the dollar. A levelling off for GBP/EUR has also been seen in early morning trade after a cent was also lost yesterday, GBP/EUR currently trading around the 1.1750 level. Data 09.30: Prelim Mort¬gage Approvals 52k from 50k, Public Sector Net Borrowing 13.2B from 16.0B & Prelim M4 Money Supply m/m –0.1% from 0.0%. 11.00: CBI Industrial Order Expectations –24 from –23.
Euro:
The euro is higher against the dollar and yen today and steady against the pound after it posted gains yesterday. However some traders are taking out short euro positions, looking for a decline to around $1.28 on the dollar. The big question in foreign exchange markets is whether the euro can hold onto its recent gains and whether the US dollar will be punished further amid growing double-dip worries. The biggest risk this week is to the euro, which could face pressure on any disappointment from the bank stress test results, due Friday. This is when the European Union faces a moment of truth with the publication of the results of test that will show whether 91 European banks can survive a new economic crises. Europe's fiscal and debt crises remains in fo¬cus as Moody’s Investor Service cut Ireland’s credit rating to Aa2 from Aa1, with the ratings agency citing its rising debt burden, a weak growth outlook and the high cost of rebuilding a shattered banking system.
No major data.
General:
• The Bank of Japan is considering easing policy should the yen stay around 85 to the dollar, DJN reports citing people familiar with BoJ deliberations.
• HYPO real estate, the mortgage lender part-nationalised by the German government after its Dublin sub-sidiary collapsed, has failed a Europe-wide banking stress test, Bloomberg reported yesterday.
• Australian borrowers may face an interest rate rise during the federal election campaign if the economic data suggests its prudent to do so, the central bank says. This may lead to more Aussie dollar strength!
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| GBP/USD | 1.5289 |
| GBP/EUR | 1.1785 |
| EUR/USD | 1.2975 |
| GBP/JPY | 132.83 |
| GBP/AUD | 1.7386 |
| GBP/NZD | 2.1442 |
| GBP/ZAR | 11.6897 |
| GBP/CHF | 1.6085 |
| GBP/CAD | 1.6055 |
| GBP/SGD | 2.0984 |
| GBP/THB | 49.29 |
| GBP/HKD | 11.8842 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