04/07/2013

Good services data boosts sterling | Smart Daily Currency Note

GBP/EUR    1.1731
GBP/USD    1.5239
EUR/GBP    0.8521
EUR/USD    1.299
GBP/AED    5.5986
GBP/AUD    1.6759
GBP/CAD    1.6036
GBP/CHF    1.4461
GBP/CNY    9.3405
GBP/HKD    11.8187
GBP/HUF    344.98
GBP/INR    91.529
GBP/JPY    151.84
GBP/NZD    1.9584
GBP/RUB    50.55
GBP/SEK    10.1987
GBP/THB    47.364
GBP/ZAR    15.323


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The strongest day in many weeks for sterling, as Services PMI figures blew forecasts out of the water to post a sixth consecutive month of better-than-expected growth. The sector, which makes up 75% of UK GDP, is performing better than any other area and sterling climbed over a cent in the two hours around the release. Today is Mark Carney's first day in the public eye with the rate decision, and asset purchasing facility announced. We're unlikely to see any dramatic changes today – especially in light of the positive data emanating from the UK this week, what will be perhaps more insightful is the minutes from the meeting which are released in a fortnight. Nonetheless, markets will be nervous, and with trading volumes low nervousness is exaggerated into volatility so call your trader to find out where sterling is trading right now.

A dramatic day for the euro as two Portuguese ministers resigned from government, prompting concerns over stability in the region and over the depth of Europe's sovereign debt crisis. While the euro gained against a weak US dollar, nearly 1% was lost to both sterling and the Japanese yen. The political backdrop will continue to dominate affairs tomorrow, as well as the ECB’s rate decision and subsequent press conference this afternoon. Any change is unlikely, but traders will listen closely for any hints as to future monetary policy. With the holiday stateside, expect volatility to be far greater than normal around the conference. Call your trader today for the very latest news, and up to the second rates for the euro.

The US dollar had a torrid day yesterday in spite of solid labour data which showed that the private sector put an extra 188’000 workers in employment, whilst the number of new people claiming for unemployment related benefits fell. Despite this, speculation grew as to whether progress in the labour market is sufficient to justify a reduction in asset purchasing facilities. The trade deficit, the difference between imports and exports, increased dramatically last month to show that imports into the US are near all-time highs. Today the US celebrates Independence Day and banks will be closed. With traders away from their desks, markets will be much less liquid than usual, and therefore much more volatile. Call in for to-the-second live rates.

Elsewhere, the Japanese yen enjoyed a strong day, benefitting from a risk averse market to push back below 100 against the US dollar. As Australia posted a higher than expected trade surplus, the Australian dollar briefly saw strength, only to promptly fall as the Reserve Bank of Australia Governor said that the currency would probably depreciate further if the economy needs it. The South African rand continued to struggle yesterday - falling for a third consecutive day as Chinese services data disappointed. The Polish zloty strengthened following comments for the central bank suggesting that after the rate cut in July, the easing cycle would be brought to an end. The Governor of the Bank of Japan has been speaking overnight and we also saw the release of building approvals figures from Australia; however, little else is scheduled to be released today. Get in touch today for the latest news, and live rates for your currency.

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