US Dollar:
Risk appetite waned yesterday as investors sold higher yielding currencies and returned to the safe haven dollar. There was a small move higher in equities but currency markets have been skittish and fickle of late as investors outlook for the global economy has swung between optimism and pessimism. This saw the greenback move higher against an already under-pressure euro, as EUR/USD moved a cent in the dollars fa-vour. Growing speculation that Japanese authorities are only likely to intervene to quell a rapid appreciation in the yen should keep (dollar-yen) under pressure in coming months. The value of the greenback against sterling was a different story, as the pound took back recent losses made versus the buck as the release of BoE min¬utes pushed cable higher, to the determent of the dollar. Since the release, the buck has fought back hard as the safe haven currency move finally played out in GBP/USD, with the buck taking back a cent since yester¬day's fall. Data 13.30: Unemployment Claims 478k from 484k & Philly Fed Manuf. Index 7.1 from 5.1
Pound:
The pound, now mixed and range bound, bounced from a three week low against the dollar Wednesday after minutes from a Bank of England committee painted a brighter economic picture than expected. The pound was also supported by the continued dissent of Monetary Policy Committee member Andrew Sentence, who wanted to increase key rates (currency positive) to keep inflation under control. Cable rallied an impressive one and a half cent to push GBP/USD to $1.5685, with GBP/EUR also trading higher as the euro come under its own pressure as the Greek debt story returned to the news wires. The pound put half a cent on its European counterpart to push GBP/EUR to 1.2158. The Bank of England minutes released showed the committee consid¬ered arguments for easing and for tightening policy at the August meeting, but eight of its key members ulti¬mately decided to leave policy on hold. There was speculation that maybe the discussion regarding QE would have been more emphasized, with members perhaps even voting to increase the bond-buying program (seen as currency negative). Inflation expectations are likely to diminish, and that, along with slowing growth, is likely to push the pound lower against the dollar in the medium term. Data 09.30: Retail Sales m/m 0.4% from 0.7%, Prelim Mortgage Approvals 47k from 48k & Public Sector Net Borrowing 5.2B from 14.5B
Euro:
The euro is down against sterling after the release of UK BoE minutes which pushed the pound higher. Against the dollar and yen we also saw euro weakness as risk appetite has taken a back seat amid recent con¬cerns over the global economic recovery and damped spirits in equities markets. Even with the well received government debt auctions, investors still worry about Greece, the original epicentre of the regions sovereign debt crises being able to implement its austerity programs. The cost to insure against default on Greek govern¬ment debt remains elevated, which tells markets, there is serious trouble lurking there. That’s ultimately going to limit the upside for the euro. The austerity measures that were supposed to fix Greece’s problems are dragging down the country’s economy. Stores are closing, tax revenues are falling and unemployment has hit an unbe¬lievable 70% in some places, with frustrated workers threatening to strike back. Another euro blow came on news that French President Sarkozy has ordered three senior cabinet members to break off their holidays for a crises meeting on the economy after a warning by Moody’s that France is closer to losing its top credit rating.
Data already out: German PPI m/m came in at 0.5%, slightly higher than expected.
General:
• Oil prices are lower at $75.33 per barrel as US stockpiles remained at record levels.
For more information or to request a call back click here
| GBP/USD | 1.5519 |
| GBP/EUR | 1.2138 |
| EUR/USD | 1.2831 |
| GBP/JPY | 133.11 |
| GBP/AUD | 1.7302 |
| GBP/NZD | 2.1781 |
| GBP/ZAR | 11.3125 |
| GBP/CHF | 1.6215 |
| GBP/CAD | 1.5985 |
| GBP/SGD | 2.1012 |
| GBP/THB | 49.01 |
| GBP/HKD | 12.0572 red-down; blue-up (snap shot) |
For more information or to get the latest spot rates contact:
John Paul Georgiou
Senior Foreign Exchange Broker
' ); document.write( addy_text27000 ); document.write( '