United States Dollar: Sterling opens this morning lower against the US Dollar. As mentioned in yesterday’s commentary, all eyes were going to be on the MPC meeting minutes in the early UK session and the outcome didn’t disappoint. Dale joined Weale and Sentance in a third vote for an interest rate increase. Dale and Weale voting for a 25 bps hike, but Sentance upped the ante calling for a 50 bps increase. The meeting also showed that the members agreed that inflation risk had risen medium term, strengthening the case for a stimulus withdrawal. Sterling surged to 1.6270 versus the Greenback on the back of this, but was short lived as pricing was probably factored in on the expectancy of this news. Cable did take a dip below 1.6200 during the US session as US existing home sales rose 2.7 % in January. This was only temporary though and a recovery for the currency pair was soon seen. A quiet Asian session saw the currency pair remained within the range 1.6205 / 1.6254, bet we open today lower at 1.6165.
– Expected range today in the GBP/USD: rate of 1.6080 to 1.6270
– Expected range today in the GBP/EUR: rate of 1.1660 to 1.1850
– Expected range today in the GBP/AUD: rate of 1.6040 to 1.6210
– Expected range today in the GBP/NZD: rate of 2.1540 to 2.1790
Euro: The single currencies gains against the US Dollar yesterday have fallen off this morning. Sell order early in yesterdays European session saw EUR/USD briefly dip below 1.3700, but Euro-zone December industrial figures soon saw it break back through this big figure. Industrial order came in at 2.1 % which was much better than the expected -0.8 % and m/m figures came in at 18.5 % which was 2.3 % above prediction. Gains for the currency pair during the US session saw it reach 1.3785 on rumours that Middle Eastern turmoil had spread to Saudi Arabia and we arent far from this figure this morning. Sterling opens lower against the Euro. Sterling had remained above 1.1800 against the single currency for most of yesterday’s session, partly supported by the MPC minutes release. We do however see the currency pair opens at 1.1748 this morning. Support for the Euro remains strong. News of Cyprus being downgraded two notches by Moodys has been shrugged off this morning with more notice been taken of French consumer confidence figures and German GDP data that have also been released early this morning.
Aussie and Kiwi Dollars: The Aussie and Kiwi have seen little change this morning against the US dollar and Pound. Sterling did jump against the antipodean currencies shortly after a third vote came in for an interest rate hike during the MPC minutes. Sterling went to a high of 1.6250 against AUD and 2.1810 versus the NZD on the back of this, but has since fallen. The currency pairs open this morning at 1.6109 and 2.1695 respectively. AUD/USD begins today’s session at 1.0035 and NZD/USD is at 0.7450. There is little more to add than what has already been mentioned and with no data for Australia or New Zealand today, eyes turn elsewhere for a indication on movement today.
