31/01/2013

US growth stumbles, will this help sterling? | Smart Daily Currency Note

GBP/EUR - 1.1670
GBP/USD - 1.5828
EUR/GBP - 0.8561
EUR/USD - 1.3544
GBP/AED - 5.8161
GBP/AUD - 1.5218
GBP/CAD - 1.5868
GBP/CHF - 1.4422
GBP/CNY - 9.83
GBP/HKD - 12.2665
GBP/HUF – 343.35
GBP/INR – 84.31
GBP/JPY – 143.83
GBP/NZD - 1.8930
GBP/RUB - 47.54
GBP/SEK - 10.0574
GBP/ZAR - 14.3361


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Sterling had a mixed day yesterday amid a number of positive developments released from the UK; but, still fell to 1.1630 against the euro at one stage. Mortgage approvals increased by more than forecast to the highest level since January 2012 showing that Bank of England scheme may have started to boost the "flow of credit" and support to the economy. Net Consumer Credit also expanded over the December period which was the largest advance in two years. The recent statements from the incoming Bank of England Governor implies there is scope to do more to support the economy with different types of stimulus and this is keeping sterling pressured, in addition to the uncertainty of Britain staying in the European Union. Today is a quiet one for data out of the UK, all eyes are will be on Fridays release of Manufacturing data. Markets will look elsewhere for influence today however, so call in now for the latest news and updates.

The euro continued to strengthen yesterday, reaching 1.1630 against sterling and 1.3570 against the US dollar at one stage. With the ECB being less inclined to ease monetary policy when compared to other central banks such as the Bank of Japan and the Bank of England, it is looking that the euro is set to continue on this rally. However, with the large selection of data set to be released within the Euro zone today, the euro's course may possible change. The most influential data coming out today is the Italian 10 year bond auction and the Spanish GDP data. Furthermore, Germany's president is also set to talk upon the  automotive industry early this afternoon. Call in now to discuss the state of the euro and for a live market quote from your trader.

Yesterday was a difficult day for the US dollar, as a combination of increasing global economic confidence and considerably worse than expected US GDP data dampened demand for the traditionally safe-haven asset. News that fourth quarter GDP had shown a contraction of 0.1% - dramatically below last quarter's 3.1% growth and predictions of 1.1% growth - saw the dollar lose significant ground versus its major peers. Continued risk appetite from the Eurozone saw the US currency fall to its lowest level since November 2011 versus the euro, whilst also paring its recent gains versus the Japanese yen. Yesterday also saw the release of key employment data which came out better than forecast and indicates that Fridays more influential reading will also be positive, however it was not enough to restore full confidence in the US economy as expectations remain rife that the Federal reserve is likely to commit to further monetary easing. Today sees the release of the weekly unemployment claims, so call in now for the latest news and to get a live price from your trader.

Elsewhere, the New Zealand dollar experienced a torrid time on the market today sliding against all of its major counterparts. This day to forget was set in motion following speculation that the reserve bank will attempt to weaken the NZD.  The Canadian dollar fell against most of its trading counterparts following the release of the worse than expected GDP data out of the US. Today see's the release of GDP data from Canada which is expected to show a monthly increase of 0.2%. The Japanese Yen also continued its trend of falling against all major counterparts. Call in now for the latest news and to speak to your trader.

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