United States Dollar: Wednesday saw further volatility for cable as market expectations weren’t satisfied during Mervyn Kings press conference. Sterling had jumped an impressive 160 pips against the Greenback on Tuesday as Kings inflation letter gave the impression interest rates are likely to rise in the near future. Many market views believing that there will be more than one rate hike over the space of this year. During the press conference Mervyn King was however far from hawkish and disappointed those looking for pointers towards an early rate hike. Cable, which had been short of breaking 1.6200 earlier on in the morning, slumped to 1.6050 on the back of this. Sterling did briefly dip below 1.6000 against the Greenback during the US session, but is sitting a lot higher this morning. Thin afternoon trade during the US market is the reason for this. GBP/USD opens this morning at 1.6098. All eyes now turn to today’s data heavy US session.
– Expected range today in the GBP/USD: rate of 1.5980 to 1.6160
– Expected range today in the GBP/EUR: rate of 1.1820 to 1.1940
– Expected range today in the GBP/AUD: rate of 1.5950 to 1.6190
– Expected range today in the GBP/NZD: rate of 2.1210 to 2.1480
Euro: The single currency wasn’t left out of yesterday’s volatile movement. It was a choppy Wednesday for the Euro versus the Greenback. Euro had initially continued to rise against the US Dollar as buyers continued to support the 17-nation currency. GBP/USD sold off then brought the EUR/USD to a session low of 1.3470, but the currency pair has recovered overnight. An Iranian gunboat story and violent unrest in Bahrain supposedly was the reason for this. EUR/USD opens this morning at 1.3541. As you can imagine, Sterling fell against the Euro as it did the Greenback. The markets anticipating Mervyn Kings speech saw GBP/EUR reach a session high of 1.1935 early morning Wednesday, but shortly after his press conference the pair fell as low as 1.1865. The fall furthered and went to a session low of 1.1835. Not as big a fall as cables, but overall a large 90 pip dip. GBP/EUR opens mid of these highs and lows and opens at 1.1872 this morning.
Aussie and Kiwi Dollars: The AUD and NZD are both currently sitting higher against the Greenback. The advances where seen late during the US Session and were believed to be down to buying from a UK clearing bank. A fairly quiet Asian session was seen overnight with any movement for the currency pairing down to the Middle Eastern unrest. AUD/USD opens at 1.0038 and NZD/USD is currently 0.7549. Sterling saw its biggest losses against the Aussie and Kiwi yesterday. The Pound fell around 180 pips against the AUD and 240 pips against the NZD, erasing the large advances it made on Tuesday. This again was on the back of Mervyn Kings speech yesterday. GBP/AUD begins the day at 1.6022 and GBP/NZD 2.1305.
