Pound news:
Sterling is registering some positive gains this morning against both the euro and dollar as general market sentiment pushes the Pound higher. Sterling had, for some time, been caught in the €1.19 range however the start of the week shows a price of €1.2083 on the market. This price is the high of the day so for the time being €1.21 does not appear to be under threat. The good news is that the low of the day is still above €1.20 so one would hope Sterling can hold this level and move to €1.21 in the near future.
Against the US Dollar we have seen Sterling gradually move higher over the last two weeks. This time last week Sterling was trading at $1.5450 and the high of the day at $1.5794 shows we are close to a three and a half cent move higher over the past seven days.
U.K Manufacturing PMI due at 09:30 is expected to show a contraction from the previous figure so anything better than this should support Sterling. After that there is nothing further in terms of macroeconomic data.
GBP/AUD is showing some volatility, broadly speaking it is trading between the $1.72 and $1.74 levels with the price on the market at $1.7310 so far, however this will change as the Australian Dollar is finding support from the solid performance of Asian stocks, boosting demand for riskier assets. Not a particularly common trading pair but the biggest move for Sterling comes against the Swiss Franc, up 1.14% at CHF1.6524.
US Dollar news:
The dollar starts this week down against Sterling and the euro as many traders feel both currencies have a little more to go before reaching their peak. Sterling has climbed well over the weekend to begin this week 0.50% up on USD at $1.5772. The euro is little changed but still above $1.30 at $1.3067. The dollar falls have been attributed to a steady stream of disappointing data and many believe this will continue today with the Manufacturing PMI due at 15:00 London time. The data is likely to show a drop in manufacturing industry which will send the Greenback even lower.
Following on from this we have Ben Bernanke speaking about the challenges that face the U.S economy. This will be closely analysed by investors for a sign of things to come. Anything to the upside or on a hawkish stance may see the dollar recover some lost ground against GBP and EUR. For the time being the global recovery looks to be on course lifting the commodity led currencies. AUD and New Zealand Dollar are both up 0.75% with the Canadian dollar up 0.46% and trading at $0.9766 having been stuck in the $0.96 range for some time.
Euro news:
For the time being EUR/USD seems to have found a holding level at $1.3050. This level has been held since Thursday with $1.31 breached but for the time being $1.31 appears to be a bit ambitious for the single currency. Many have suggested that the euro is due to fall lower against the dollar but no one has actually been more specific about time frames and levels.
FX Concepts LLC, a hedge fund that manages $8billion in assets has offered a little more insight by suggesting the euro’s advance from a four year low will be undone by September as a result of austerity measures crushing any hopes of growth. Other research firms have also forecasted a drop lower for the euro, Shaun Osborne chief currency strategist at TD Securities Inc. in Toronto has forecast the currency will depreciate to $1.08 by year-end.
For the time being the euro is trending very much in-line with the equity markets and thus far the numbers have impressed the markets. HSBC is the latest to show stellar earnings, this morning the bank showed earnings double market expectations.
Quote of the Day
“Real success is finding your lifework in the work that you love”- David McCullough
