United States Dollar: GBP/USD continued to tick lower yesterday. It eventually traded to a low of 1.5490 as global markets shunned risk over concerns about European peripheral debt. Some profit taking overnight however sees cable open slightly higher in London and it trades at 1.5585 currently. There was no UK economic data released yesterday and so attention was wholly focused on Europe, ECB President Trichet”s comments and other official statements. Meanwhile US consumer confidence data delivered few surprises, whilst UK Nationwide house price data released earlier on this morning showed that house prices fell 0.3% in November. UK manufacturing and a heavy calendar of US data is awaited today.
– We expect a range today in the GBP/USD rate of 1.5560 to 1.5710
Euro: EUR/USD eventually sunk beneath 1.3000 yesterday but found itself well bid under the big figure. It touched on 1.2980 a couple of times as traders concerned themselves with the state of peripheral European finances. As it was testing lows German economic adviser Peter Bofinger was quoted on television as saying that the risks to the euro were enormous and that Germany must decide whether it wants to keep the single currency. Meanwhile ECB President Trichet moved to calm the turmoil. He said that the economy was recovering faster than expected and that the state of European finances had been underestimated. He also said that the ECB would not adjust its policy for the needs of a single country within the Euro zone. There are a few rumours about this morning that the ECB will demonstrate their willingness to act to prevent the debt crisis spreading by tomorrow. Only rumours mind you but as a result EUR/USD is better bid this morning and it opens at 1.3060. The risk is still towards the downside however. The euro fell across the board yesterday and GBP/EUR almost made it through 1.2000. Not quite but the threat is still there and it opens this morning at 1.1930.
– We expect a range today in the GBP/EUR rate of 1.1910 to 1.1990
Aussie and Kiwi Dollars: AUD/USD fell to a low of .9550 overnight. It was mainly a reaction to the problems facing the Euro zone currently and the subsequent sell off in risk but also a reaction to weaker than expected local GDP figures. This showed that the economy expanded by 0.2% in the third quarter below forecasts for an increase by 0.5%. Meanwhile NZD/USD fell to a low of .7400. Both are slightly higher this morning however as they track the mild rebound in EUR/USD. They open at .7460 and .9625 respectively. GBP/AUD and GBP/NZD have done little over the last 24 hours and trade at 1.6205 and 2.0910.
– We expect a range today in the GBP/AUD rate of 1.6160 to 1.6340
– We expect a range today in the GBP/NZD rate of 2.0860 to 2.1080
