United States Dollar: A quiet day Monday was certainly met with a greatly busier day Tuesday. A lot of data releases to cover, but the main one yesterday was the UK CPI and RPI figures or more to the point the Bank of England inflation letter that followed. Both the CPI and RPI releases coming in as predicted. This lead to Mervyn King’s letter stating that inflation will fall back to 2 % in two to three years, assuming the base rate is lifted in line with market expectation. The suggestion of future rate increases in this passage was what aided the Pounds gains. Sterling, on the back of this, is higher across the board and has seen an impressive 160 pip gain versus the Greenback. Worth mentioning also before stating where GBP/USD sits this morning is that US retail sales come in lower than expected. We have also seen UK Nationwide consumer confidence coming in lower than expected overnight, but cable seems to have ignored this release for now. GBP/USD opens this morning at 1.6170.
– Expected range today in the GBP/USD: rate of 1.6040 to 1.6280
– Expected range today in the GBP/EUR: rate of 1.1810 to 1.1980
– Expected range today in the GBP/AUD: rate of 1.6020 to 1.6260
– Expected range today in the GBP/NZD: rate of 2.1260 to 2.1580
Euro: The single currency remained active yesterday and has advanced against the Greenback. French and German data weighed heavy on the Euro yesterday seeing GDP figures for the two countries coming in lower than expected. This saw an initial dip for EUR/USD, but the currency pair picked up with notable buyers at the lows. The buying has continued into today session and sees the currency pair back up at 1.3557 currently. The Euro has however fallen against the Pound. As mentioned above, the Pound is higher across the board after Mervyn Kings letter seemingly suggested rate increases are needed. The Euro was no exception to this and we saw GBP/EUR gain 120 pips yesterday. These gains have maintained into today’s session and the currency pair is above the big figure 1.1900 currently. GBP/EUR is sitting at 1.1918.
Aussie and Kiwi Dollars: The Aussie and Kiwi start today’s session both lower against the US Dollar. The anitpodean currencies impressive gains after the Chinese CPI figures were released Monday have now come to an end. Possibly a sell off at the highs has been seen. Despite some upward movement overnight; we are seeing AUD/USD at 0.9992 currently and NZD/USD is at 0.7537. Sterling saw big gains against the AUD and NZD yesterday. It advanced 240 pips versus the Aussie and 290 pips against the Kiwi at the peak of its gains. These jumps have maintained this morning, just slightly off the highs though. GBP/AUD opens at 1.6151 and GBP/NZD is currently at 2.1411.
