US Dollar:
The Dollar has staged a fight back over the weekend with EURUSD breaking below 1.26 and cable dropping over 2 cents since Friday to trade below 1.50. The move came despite any clear fundamental catalyst other than a possible technical correction but with critical support levels in sight of 1.2548 and 1.4947 what be¬gan as bear market squeeze for the buck could develop into the wider resumption of USD strength. Direction this week will come from the FOMC meeting scheduled and advanced retail sales both due for release on Wednesday. Later in the week we have producer price index and consumer price index which should all give us a good insight into the health of the worlds largest economy.
DATA : FED’s Lacker speaks.
Pound:
Sterling has come under significant selling pressure since Friday morning and the start of London trad¬ing hasn’t brought any relief. Despite the FTSE 100’s bounce back above 5000 to a respectable 5140, risk aver¬sion appears to have taken control again. The Bank of England meeting brought no surprises last week by keeping the base rate on hold at 0.5% and keeping QE on hold at 200 billion. Weighing on Sterling this morning is a story in the Guardian newspaper claimed that top UK banks plan to warn Chancellor George Osbourne that the government’s proposed regulation changes will bring a double dip recession. Citing research from PriceWa¬terhouseCoopers, the banks claim that raising reserve requirements may drain up to 1 trillion pounds from avail¬able liquidity, pushing up borrowing costs and weighing on economic growth to the tune of 2 percent of GDP. Data this week includes final reading for UK GDP Q1 but this will yield no surprises but the CPI reading sched¬uled for tomorrow should have more of an impact. The BOE have for some time now been predicting inflation to drop back to its 2% target but it has remained stubbornly high. We have employment data due Wednesday which again will be closely watched for clue to the health of UK work force.
DATA : UK GDP Q1 (Final reading)
Euro:
The advance in the single currency continued last week after the vicious bout of selling that began back in March. The euro's gains last week came amid signs that investors have pared their bearish bets on the cur-rency amid a thawing of concerns about Europe's sovereign debt crisis. Bets against the euro plummeted by 48% compared with week-earlier levels, as easing concerns over the euro zone caused short-term investors to unwind their anti-euro positions. Despite this, Brian Kim, currency strategist at UBS in Stamford, Conn., noted that even with the euro's "nice run…the fundamental backdrop has not changed." Debt-laden, slow-growth economies still pose a threat to the region's financial system, and investors await the July 23 European bank stress tests to gauge the threat. Ahead of those results, the euro should hold onto most of its recent gains, trad¬ing this week between $1.2480 and $1.2725 noted one dealer.
DATA : French Current Account deficit (MAY)
General:
BP was at the centre of fresh takeover speculation after weekend reports suggested the Obama ad-ministration has told ExxonMobil – the world's largest oil firm – that it would not stand in the way of a takeover bid for the stricken British rival. Before the Gulf of Mexico oil spill BP was Britain's biggest company with a stock market value of £121bn. Since then more than £50bn has been wiped off its share value and a number of po¬tential bidders are rumoured to be circling to take advantage of its weakened state.
For more information or to request a call back click here
| GBP/USD | 1.4995 |
| GBP/EUR | 1.1920 |
| EUR/USD | 1.2575 |
| GBP/JPY | 133.08 |
| GBP/AUD | 1.7185 |
| GBP/NZD | 2.1173 |
| GBP/ZAR | 11.4853 |
| GBP/CHF | 1.5943 |
| GBP/CAD | 1.5473 |
| GBP/SGD | 2.0716 |
| GBP/THB | 48.22 |
| GBP/HKD | 11.65 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