US Dollar news:
The dollar is mixed as we head into today’s trading session. In a conflicting set of events the Federal Reserve is set to keep interest rates at an all time low through the middle of next year as the U.S recovery starts to wobble. This would have capped any gains for the US Dollar, however, a falter in the U.S recovery would be felt globally and as such the dollar finds itself up against the commodity lead currencies as investors move to safer assets.
The Canadian dollar is now heading down to the $0.95 levels having been at $0.97, currently trading at $0.9611. The boost given to Sterling by the budget report is still having its effect on the Pound, whilst down on the day by 0.07% the buy price of $1.4944 is up just shy of 50 pips from yesterday at $1.4897.
Trading against the euro is looking pretty flat today but like the Pound it has climbed well over night to a level of $1.2298 versus $1.2235 yesterday. The big news yesterday was the rate decision although everyone was expecting no change and no change it was. For today we can look forward to unemployment claims at 13:30 London time, the market looking for 461,000 which is a downward revision from the previous figure of 472,000.
Pound news:
A brief look at the day’s highs and lows show that at 5am this morning Sterling hit a high of $1.4997 against the U.S dollar. Clearly $1.50 was a formidable resistance level and as such the Pound has dropped away from there to land back in the mid $1.49 levels.
Sterling received a further boost as ratings agency Moody’s joined the party to announce that the U.K will not lose its AAA rating. This could be viewed as stating the obvious but everything helps at this fragile stage. In more positive news minutes from the Bank of England meeting showed that one member was in favour of a rate rise. As stated yesterday this one vote is some way from a majority vote but nevertheless investors jumped at the news thus Sterling has continued to move up against the majority of its traded pairs this morning.
Against the Australian dollar the Pound is trading above AUD$ 1.7170, AUD$ 1.7188 the price to buy on the market with AUD$ 1.72 approaching. The Pound is also trading well against the euro, a comparison against yesterday’s price shows a move down of 10pips but the current price shows Sterling holding above €1.2160 so far. There is no news for the GBP today, or tomorrow for that matter, so any moves will be driven by comments and developments elsewhere.
Euro news:
The state of the recovery for the euro zone is dividing opinion. Naturally those with a vested interest in the euro zone are calming fears with comments such as “Measures taken by Italy are going in the right direction,” that one courtesy of Jean- Claude Trichet. However, according to RBS Securities Japan the euro may weaken 20% against the dollar as the austerity measures required to reduce the deficit are likely to quash growth and lead to deflation.
So far though the euro has maintained the high $1.2270 levels having hit a high of $1.2350 for the day, however it appears to be under slight pressure as it ticks down to a -0.18% move for the day. A look back over two weeks shows gradual moves from $1.19 through to $1.23 and so this move down may suggest we are edging lower as EUR/USD trades within a rather broad range of $1.19-$1.23.
The macroeconomic news front is quiet for today but as is often the case the euro may move on outlandish comments throughout the day. So far the euro has found some support via ratings agency Fitch who said that there are no more foreseeable downgrades to come for Spain.
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