United States Dollar: The pound fell vs. the US dollar on Tuesday after figures showed that public sector net borrowing rose from £16.7 billion last year to £22.8 billion. The data is evidence that the UK government faces a difficult task and it put downward pressure on sterling for much of yesterday afternoon. GBP/USD fell to a low of 1.5440 yesterday falling 120 points from earlier that morning. It is little changed today and opens up at 1.5475. After a quiet week so far the calendar gets a bit busier today with UK current account and MPC minutes due. US existing home sales are due later in the afternoon.
– We expect a range today in the GBP/USD rate of 1.5410 to 1.5540
Euro: EUR/USD touched on 1.3190 early yesterday morning before promptly meeting solid resistance. It fell almost immediately to a low of 1.3080, sellers of all types riding the trend owing in part to a Moody’s warning that Portugal faced a ratings cut. There are concerns over the threat to other European countrys sovereign credit ratings too. EUR/USD has clawed its way back overnight however and opens this mornings session at 1.3140. Central bank buying and news overnight that China will take concerted action to help Europe has helped support the currency. The Euro has also strengthened against the pound, although the range in ERU/GBP has been narrow over the last 24 hours. GBP/EUR trades at 1.1775 currently.
– We expect a range today in the GBP/EUR rate of 1.1720 to 1.1810
Aussie and Kiwi Dollars: Markets have been a little reluctant to take AUD/USD through parity in the last 24 hours as the holiday and the prospect of thinner markets approaches and concerns over European debt lingers on. It has traded .9955/.9990 in the last 24 hours. NZD/USD on the other hand has fallen overnight as current account figures showed that the countrys deficit widened during the third quarter to NZ$ 1.77 billion. The kiwi has dropped from .7460 to .7415 against the USD in the last 24 hours and opens the London session at .7430. Both GBP/AUD and GBP/NZD are both lower again this morning, owing mainly to the UK public sector borrowing data yesterday. They trade at 1.5490 and 2.0790 respectively.
– We expect a range today in the GBP/AUD rate of 1.5400 to 1.5540
– We expect a range today in the GBP/NZD rate of 2.0700 to 2.0900
