United States Dollar: Sterling opens above 1.61 against the dollar this morning. The pound fell below 1.60 at the start of yesterday’s trading but fought back thanks to positive rhetoric from the governor of the Bank of England. During his inflation report on Wednesday morning he suggested that the UK would avoid going back into recession thanks to measures taken by the government to cut public spending in last month’s review. This was all traders needed to hear from the typically dovish King to send the pound higher. He did however suggest that inflation would continue to rise and stay above the government’s target rate of inflation until the end of 2011. Today sees the start of the G20 summit in Seoul, the main focus is on whether members of the G20 can reach an agreement on global trade. In yesterday’s British press David Cameron is quoted as saying we need to stop the “tidal wave” of money going from west to east in order to see a the world recover from the global crisis. Today is a bank holiday in the US (Veterans day).
– We expect a range today in the GBP/USD rate of 1.5990 to 1.6285
Euro: Sterling continues its recent gains against the Euro through yesterday and into early trading this morning now up above 1.17. Against the dollar, Euro has fallen to just above the key 1.37 level. Concerns continue over sovereign debt amongst the “peripheral” Euro members such as Ireland and Portugal. The cost of borrowing for the Irish government has reached its highest level since the Euro began, this leads to concerns that they may look for external help with the most likely source of aid coming from the International Monetary Fund. Today sees the release on the ECBs monthly bulletin giving us some insight to their view on economic conditions, it will be interesting to see what picture they paint given the current problems with the smaller European economies. Focus will then turn to tomorrows preliminary German GDP figures. Europe’s biggest economy has been the key to Euro strength and tomorrow could see a much needed shot in the arm for the Euro.
– We expect a range today in the GBP/EUR rate of 1.1650 to 1.1790
Aussie and Kiwi Dollars: The AUD had a lively 24 hours, employment data released overnight shows that the number of people employed was up by more than 29,000 compared with last month. However the unemployment rate went up from 5.1% to 5.4%, this is down to more people looking for work, a good sign for the Australian economy as there were concerns over a labour shortage. The market reacted to these figures and the AUD fell below parity against the USD but only for short time, it currently sits at 1.0014. Sterling also went higher after the release and buoyed by the Bank of England’s positive inflation report GBP/AUD currently sits at 1.6111. GBP/NZD remains volatile but up from its recent lows of 2.0300 to start trading in London at 2.0565. Following comments from the finance minister in NZ yesterday the NZD fell against the USD however this respite was short lived and the market is back on the rise, currently at 0.7832. Uncomfortable viewing for a finance minister who is clearly concerned of the effects these levels have on NZ exports.
– We expect a range today in the GBP/AUD rate of 1.5930 to 1.6220
– We expect a range today in the GBP/NZD rate of 2.0460 to 2.0690
Data Releases:
- AUD: No data due for release today
- EUR: ECB Monthly Bulletin,
- GBP: Nationwide Consumer Confidence
- NZD: No data due for release today
- USD: No data due for release today Bank Holiday in the US today – Veterans Day
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