– Expected range today in the GBP/USD: rate of 1.6090 to 1.6180
– Expected range today in the GBP/EUR: rate of 1.1795 to 1.1860
– Expected range today in the GBP/AUD: rate of 1.5780 to 1.5940
– Expected range today in the GBP/NZD: rate of 2.0680 to 2.0900
United States Dollar: Another quiet 24 hours sees GBP/USD open at 1.6065 this morning. The Jan UK BRC Shop Price Index released overnight was strong, hitting its highest level since November 2008 but this was largely overshadowed by news that the CBI downgraded its growth forecast for 2011. It hasn’t been a big surprise given the dreadful GDP data released recently but it is still weighing on the pound this morning. Data is thin again today, only trade balance figures are due this morning. Fed Chairman Bernanke testifies this afternoon but the main event for GBP/USD will be the BoE monetary policy decision tomorrow. In the meantime 1.6000 is likely to remain intact, just about.
Euro: EUR/USD has been mildly bid in the last 24 hours. Overall the range has been fairly narrow though, trading 1.3600/1.3680. This comes despite the release of weak German Industrial Production data released yesterday morning. Output dropped 1.5% from November and EUR/USD fell to 1.3600 on the release. It failed to fall below this big figure though despite a recent run of poor German data, supported in part by EUR/GBP buying. German trade balance figures, released this morning, are supportive of the single currency. These have showed that exports increased for the second month in December rising 0.5% from the previous month. As mentioned already profit taking/buying in EUR/GBP means this cross opens higher at .8480 (1.1790) this morning. The CBI UK growth downgrade has also played a part in this move.
Aussie and Kiwi Dollars: New Zealands Finance Minister said overnight that a double dip recession was possible. The Kiwi gapped lower on the news from .7750 to .7710 after previously having traded to a high of .7788 during the New York session. It has found support at .7700 so far and opens the London session at .7710. In other news the Peoples Bank of China announced a 25 basis point increase to the benchmark deposit and lending rates yesterday. It knocked both the AUD and NZD (the theory going that any attempt to suppress/control growth will negatively impact on Australias exports). AUD/USD fell from 1.0190 to 1.0120 following this. It opens at 1.0125 this morning ahead of key Australian employment data due later tonight. GBP/AUD and GBP/NZD open this morning at 1.5890 and 2.0850 respectively.
