Good morning and welcome to today’s foreign exchange market commentary on Thursday, the 2st of February.
The common currency made some smart recovery after strong European manufacturing data and better than expected US construction numbers hit the market. UK manufacturing data made the smartest recovery, bouncing back to its highest level since May 2011. Of course, one swallow doesn’t make a summer, but the double-dip recession can wait.
The new set of data will not alter the BoE’s long term outlook of the economy, especially, if the EU crisis continues to linger. So the quantitative easing is probably happening in February. The euro will probably survive, but Greece’s eventual exit may not be averted. However, a prolonged recession in Europe will surely affect British economy, and a growth driven by domestic consumption can possibly ensure that the UK coming out of a shallow and short-lived double-dip recession.
CURRENCY RATES OVERVIEW
GBP/EURO – 1.2014
GBP/US$ – 1.5834
GBP/CHF – 1.4494
GBP/CAN$ – 1.5799
GBP/AUS$ – 1.4758
GBP/ZAR – 12.1091
GBP/JPY – 120.58
GBP/HKD – 12.2822
GBP/NZD – 1.8994
GBP/SEK – 10.6320
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EURO: The string of positive numbers from the Euro Zone triggered a rally with the sngle currency briefly hitting the 1.32 level against the greenback. Strong European manufacturing data and better than expected US construction numbers strengthened risk appetite and the euro changed hands at 1.3159 later against Tuesday’s 1.3048 against the USD.
USD: The greenback lost ground against both the single currency and the cable yesterday as investors remained upbeat over positive economic number from both side of the Atlantic. Sterling traded at 1.5833 against the greenback yesterday against 1.5759 on Tuesday. The dollar index, which measures the greenback against six leading currencies dropped to 78.924 from 79.277 on Tuesday.
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Have a great day
