30/01/2013

Respite for sterling, will it be all too brief? | Smart Daily Currency Note

GBP/EUR - 1.1656
GBP/USD - 1.5753
EUR/GBP - 0.8574
EUR/USD - 1.3502
GBP/AED - 5.7839
GBP/AUD - 1.5059
GBP/CAD - 1.5785
GBP/CHF - 1.4528
GBP/CNY - 9.78
GBP/HKD - 12.2178
GBP/HUF – 344.21
GBP/INR – 84.16
GBP/JPY – 143.47
GBP/NZD - 1.8842
GBP/RUB - 47.30
GBP/SEK - 10.0280
GBP/ZAR - 14.2086


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Yesterday proved to be a stronger day for sterling than we have seen recently, managing to halt its continued declines versus many of its major trading peers. News that one of the Bank of England's policy makers suggested that the UK's economic growth is likely to grow between 2 to 2.5 per cent over the next 18 months - considerably higher than previous estimates - helped support sterling and see it increase from a five month low versus the US dollar. It was also a better day versus the euro, with sterling rising for the first time in four days, returning above the key 1.1700 level at one stage. Today we see the release of data showing the net lending to individuals and statistics demonstrating the number of new mortgage approvals which will provide an insight into the current levels of consumer spending and their confidence in the UK's economy. Early suggestions are for a slight improvement, so call in now for the latest news and to get a live price.

It was a mixed day for the euro yesterday as the continued play-off between risk appetite and risk aversion continued to influence demand for the single currency. Increasing consumer confidence across the currency bloc, coupled with news that the European stock markets appreciated to a near two-year high saw the 17-nation currency rise to the highest level since December 2011 versus the US dollar. It was a different story versus higher yielding currencies - most notably the Swedish krona and Norwegian Krone - as improving global economic sentiment and risk appetite led to an increase in demand for  riskier assets. German Consumer Climate data released yesterday came out as forecast, reinforcing the belief that economic sentiment is improving in the Eurozone's powerhouse economy. Today sees the release of Spanish GDP data, alongside  German 30-year and Italian benchmark 10-year bond auctions. Call in now for the latest news from the Eurozone and live prices on the euro.

It was a difficult day for the US dollar yesterday as a combination of considerably worse than forecast US Consumer Confidence and increasing global risk appetite decreased demand for the traditionally safe-haven currency. Continued improvements in global economic sentiment - most notably across the Eurozone - saw the US dollar fall to a 13-month low versus the euro, whilst also failing to continue its recent rise versus sterling. Today sees the release of key employment data, this is likely to give a clear insight into the current levels of economic health in advance of the official Non-Farm Employment data being released on Friday. The FOMC will be making a statement today following its latest decision on Monetary Policy. Furthermore, we also have the advanced GDP figures for the fourth quarter of 2012 released. Expectations are for a significant decline from the last release; but, are expected to show growth of over 1%, so call in now for the latest news and the see how this will impact the US dollar.

Elsewhere, it was a good day for the Australian and New Zealand dollar, performing well against the majority of their major trading peers. News that Australian Business Confidence had improved considerably - it was in fact the largest rebound in over a decade - from last month's level saw the Australian dollar increase versus 14 of its 16 major partners. Similarly, an unexpected reduction in New Zealand's trade deficit saw the currency snap a three-day decline versus the US dollar. It was also a better day for the Canadian dollar, managing to rise for the first time in four days versus the US dollar after it failed to break through the key level of CAD/USD 1.01, this is spite of the pessimistic outlook for economic growth in Canada. Today sees the release of Swiss economic barometer information in the morning, before the latest key Interest rate decision from the Reserve Bank of New Zealand late this evening. Call in now for the latest news and to speak to your trader.

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