United States Dollar: The pound has held up well against a US dollar that has strengthened against most other currencies in the past few sessions and especially overnight. GBP/USD has traded a fairly narrow 1.6050/1.6160 range over the past 24 hours during which there was a public holiday in the US. It opens up this morning at 1.6055 as the dollar firms ahead of the G20 meeting this weekend (more on this later). GBP/USD remains above the figure this morning despite the release of figures showing that consumer confidence in the UK continues to fall, this according to Nationwide. The focus today is likely to be on US consumer sentiment data whilst anticipation that currencies will be discussed at the G20 meeting this weekend will likely keep USD well bid throughout the day.
– We expect a range today in the GBP/USD rate of 1.5970 to 1.6090
Euro: EUR/USD has continued to weaken over the past 24 hours. Concerns have not abated over the state of peripheral European purses. The French Finance Minister backed calls by Germany for investors to share in the costs of restructuring debt which saw spreads widen even more yesterday. Ratings agencies are still yet to reach agreement on their evaluation of Irish debt too which is also causing concern for EUR/USD traders but the main driver of the weaker Euro in the last 24 hours has been the suggestion by a government official that Greek deficit levels may actually exceed forecast. With the prospect of currencies forming a good part of the discussions at the G20 this weekend the USD is firmer against the single currency, as well as others, as markets are off risk. It has already started in fact with some positive statements so far; the US saying they are encouraged by China”s currency progress, changes need to happen gradually, but the exchange rate alone is not sufficient to induce large changes needed to rebalance the world economy. EUR/USD has fallen below the 1.3600 figure in early European trade this morning, down from 1.3780 this time yesterday. With this GBP/EUR continues to climb higher and trades at 1.1790 this morning.
– We expect a range today in the GBP/EUR rate of 1.1760 to 1.1860
Aussie and Kiwi Dollars: Both AUD/USD and NZD/USD have been dragged lower by the sell off in EUR/USD. This comes despite commodity prices doing well today. The European sovereign debt issue is back in focus and is hurting the high yielding and somewhat riskier trades involving both AUD and NZD. Added to this is the advance of the dollar pre G20 meeting this weekend. AUD/USD has fallen back under parity and trades at .9860 in London this morning, whilst NZD/USD sits at a .7745. They are off from 1.0050 and .7870 respectively from 24 hours ago. This has meant that both the GBP/AUD and GBP/NZD cross rates are higher this morning and trade at 1.6290 and 2.0710.
– We expect a range today in the GBP/AUD rate of 1.6190 to 1.6390
– We expect a range today in the GBP/NZD rate of 2.0610 to 2.0840
Data Releases:
AUD: No data due for release today
EUR: German, French, Italian GDP, European Flash GDP, Industrial Production
GBP: CB Leading Index
NZD: No data due for release today
USD: Consumer Sentiment, Inflation Expectations
