United States Dollar: Cable continued its push higher yesterday and just about managed a break the 1.6300 figure. It eventually traded to a high of 1.6330 after most UK economic data released printed above expectations yesterday. It started with UK Nationwide house prices, mentioned in yesterday’s commentary. UK Manufacturing PMI released at 9:30 then showed that activity remained at a record high in February, the index coming in at 61.5. At the same time figures showed that UK mortgage approvals in January rose by 46,000 vs. expectations for a rise of 43,000. Later on in the day Fed Chairman Ben Bernanke stated in his testimony that QE2 will go ahead as planned and that commodity linked inflation was not a problem, all of which was no surprise to a market more concerned about rising tensions in Northern Africa/Middle East. Risk is off and the USD is stronger this morning as a result. Risk selling started following news yesterday that tanks from Saudi Arabia were entering Bahrain. Global equity prices finished mostly in the red yesterday and continue to be pressured lower and GBP/USD starts the day off lower at 1.6240.
– We expect a range today in the GBP/USD rate of 1.6160 to 1.6300
– We expect a range today in the GBP/EUR rate of 1.1720 to 1.1820
– We expect a range today in the GBP/AUD rate of 1.5920 to 1.6120
– We expect a range today in the GBP/NZD rate of 2.1890 to 2.2090
Euro: EUR/USD has trickled lower over the last 24 hours. It has suffered as investors turn to the safe haven of the USD whilst tensions continue to rise in the Middle East and Africa. Over the last 24 hours the pair has fallen from 1.3840 to where it now trades at 1.3770. The USD strengthened despite a mixed set of US data; ISM Manufacturing PMI beat expectations whilst Construction Spending disappointed. European data on the other hand was generally positive; the unemployment rate, as the main release, fell to 9.9% vs. expectations for 10%. Against the pound the euro has traded a fairly flat range. It opens just above yesterdays opening level at 1.1795.
Aussie and Kiwi Dollars: The kiwi slumped overnight after Prime Minister John Key said that he would welcome an interest rate cut following the disaster of last weeks earthquake in Christchurch. NZD/USD fell from .7530 to a low of .7385 on the comments. Support comes in close to the .7400 figure currently and it opens at .7395 this morning. The situation in Middle East/Africa has not helped either and with traders shorting risk both the high yielding AUD and NZD have suffered. AUD/USD is lower having falling from 1.0200 to 1.0090 over the last 24 hours. The better than expected GDP data released in Australia overnight, which showed that the economy rose by 0.7% did little to support the local unit. It opens at 1.0095. AUD and NZD are lower across the board, especially the NZD this morning. GBP/NZD now threatens a break of 2.2000. GBP/AUD opens at 1.6060.
