Foreign Currency News Updates

US Dollar news:
The Dollar finds itself broadly stronger this morning despite the weak data from yesterday. Home sales, personal spending and personal income were all to the downside but even so the dollar has clawed back some lost ground against both the euro and the Pound. The dollar strength has come off the back of improved jobs data as well as growth in the services industry, both of which overshadowed the poor data earlier.

Sterling is now trading at $1.5840 having moved lower to $1.5882 at 16:30 yesterday. The euro has also slipped from $1.32 levels to now trade at $1.3140, marginally lower from yesterday’s $1.3154. “You’re seeing dollar recovery with these data releases,” said Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut. “It might not be as bad people are saying.” For the time being the outlook “remains unusually uncertain” according to Federal Reserve Chairman Ben Bernanke. Australian Dollar and New Zealand Dollar are both suffering today, NZD down -1.14% after the jobless rate rose more than forecast. However, the Canadian Dollar has moved higher and is now trading at 0.9865 and up 0.47% on USD. The one to watch today for USD is unemployment claims out at 13:30 London time.

Pound news:
A look at the market reveals Sterling is broadly weaker this morning against the vast majority of its traded pairs. Against the euro we are still trading in the €1.20 levels but we have slipped from yesterday to now trade at €1.2048 and down -0.15% for the day. Again, the highs and lows of the day show just a 40 pip movement as Sterling trades within tight ranges. The move lower is slightly more pronounced against the dollar and as such the slip by -0.28% has seen Sterling dip to $1.5840.

Data yesterday was mixed but there was no shock story so the move lower against USD is as a result of improved sentiment for the U.S economy. Generally speaking Sterling has not fallen by any great margin, the biggest falls coming against CAD as the Pound drops -0.63% to $1.6065.

Trading against the Australian dollar is flat so far with no percentage change registered with AUD $1.7327 your price to buy. Some very important data due today, the MPC rate statement, official bank rate and asset purchase facility are all to be announced today. It is highly likely we will see no change in any of these but traders will be looking for signs of things to come in the MPC statement. A potential market mover could occur if more members of the MPC join Andrew Sentance in voting for a rate hike. On the last two occasions Mr Sentance was a lone ranger in raising interest rates.

Euro news:
The improved data from the U.S could be the start of a gradual move lower in EUR/USD. Current levels are still very high at $1.3140 but should the Greenback get the upper hand and win over the confidence of the market then we are likely to see traders take their profits, if they were long on the euro, resulting in further euro falls. Recent data from the euro zone has been close to market expectations leading to little movement in the euro of late.

The ECB press conference at 13:30 London time could see some movement for EUR/GBP and EUR/USD if any clues on the future state of the single currency are revealed. This will be the first press conference where Mr Trichet will not have to deal with a particular issue such as sovereign debt or contagion risks.

Trading for the euro this morning appears to be mixed as the euro moves ahead on Sterling but slips lower on the dollar. However, trading does appear to be in tight ranges for the euro as the moves higher and lower have been contained to + or – 0.20%. The euro has moved substantially higher against NZD but this has resulted in weak data from New Zealand, furthermore, EUR/NZD is not a particularly frequent trading pair outside of direct business transactions between the two regions.

Quote of the Day
“If your ship doesn’t come in, swim out to it.” – Jonathan Winters