Good morning and welcome to today’s foreign exchange market commentary on Monday the 25th of March, 2013.
Here are MyCurrencyTransfer.com’s top 5 currency highlights:
- Back from the brink: 10 Billion Cyprus bail out approved
- Holders of deposits of more than €100,000 face big losses
- Initial Euro bounce post Cyprus deal runs out of steam
- Next & AG Barr threaten price hike if sterling continues to plummet
- South African Rand hits seven week low against GBP
DAILY CURRENCY RATES OVERVIEW
GBP/EURO – 1.17103
GBP/US$ – 1.52296
GBP/INR – 82.4816
GBP/CAN$ – 1.55459
GBP/AUS$ – 1.45471
GBP/ZAR – 14.0921
GBP/JPY – 144.323
GBP/NZD – 1.82278
Exchange rates valid at 25 March, 2013 09.35 GMT.
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Key releases in the next 24 hours that may affect currency date:
Australia: RBA Gov Stevens Announcement
Europe: No data
United Kingdom: BBA Mortgage Approvals
New Zealand: Trade Balance
United States of America: FOMC Member Dudley Speaks, Fed Chairman Bernanke Speaks
GBP
Expect a price hike ! Two of the UK’s biggest companies, Next & AG Barr, have both said they will need to raise prices next year if the pound remains at it’s present levels against USD. The plummeting pound is seen a big risk factor to the cost of production. If that wasn’t enough, Fitch has put the UK on a Rating Watch Negative, meaning a further downgrade could be on the agenda, affecting bond yields. This morning, GBP has seen some strength against USD, hitting a one month high of 1.5269. This can be attributed to positive data on UK house prices, the largest climb in three years.
EUR
Today’s big announcement is that Cyprus has reached a landmark agreement to receive a 10 Billion Euro bailout for its failed banking system. Markets are all set to trade positively off the back of the news, albeit we have seen a limited reaction thus far.
It’s not all rosey in Nicosia however. Standard & Poors cut Cyprus’ sovereign long-term foreign currency credit rating even deeper into junk territory. Their status has been downgraded to CCC from CCC-plus, thus meaning it is more expensive for the country to borrow money.
GBP to EUR HISTORICAL EXCHANGE RATES
USD
The US Dollar had a dismal end to the week and lost ground against a basket of currencies on Friday. Top of the bill was the Euro, where Cable lost significant ground. The rate did manage to rise back up above the 1.30 levels for a short period.
If you are buying or selling US dollars, brace yourself for a number of events this week to watch out for. The Chairman of the Fed is arriving in the UK to participate in a panel event and as always, his comments will be eagerly heard and acted upon by traders in the City. This week also sees figures on house sales, consumer confidence and unemployment. Stay tuned.
GBP to USD HISTORICAL EXCHANGE RATES
ZAR
The South African Rand was the biggest loser and continued it’s downward trajectory on Friday, hitting a seven week low against GBP. It’s clearly suffering in this risk averse market amplified by the crisis in Cyprus.
AUD
News of the multi-billion Cyprus Bailout has improved Risk Sentiment over the past 12-24 hours. The AUD / USD pairing has shifted from 1.4030 to a high of 1.4070. It looks as though Cyprus will continue to steal the limelight this week and therefore dictate the near term direction of Aussie v US Dollar.
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