United States Dollar: GBP/USD has been fairly range bound over the last 24 hours. It is up very slightly on this time yesterday and trades at 1.5630 currently. US yields have dipped slightly from their highs meaning the USD opens on the back foot this morning. Economic data had little overall influence yesterday too. UK retail sales came in close to market forecasts, rising 0.3% in November due to increased demand for food and pre Christmas shopping. The US Philly Fed Manufacturing Index came in strong during the afternoon. Figures showed that manufacturing expanded at its fastest pace since April 2005 rising to 24.3. We saw initial demand for the dollar following the data; GBP/USD gapped from 1.5620 to 1.5570, but then continued its recovery from here. Economic data is lacking today so the quiet range is likely to continue.
– We expect a range today in the GBP/USD rate of 1.5580 to 1.5700
Euro: Moody’s the credit ratings agency have been busy. They have announced today that Irelands rating has been lowered to Baa1 from Aa2. Its not a surprise to the market however and the news has been largely ignored. As US treasury yields fall EUR/USD pushes higher. In the last 24 hours it has recovered off of 1.3200 and opens up the final day of the week at 1.3295. Not much has come out from the EU Economic Summit yet, though we may hear some news today. European CPI meanwhile came in as expected yesterday at 1.9% y/y. GBP/EUR has fallen overnight, drifting from yesterday evenings high of 1.1820. It trades at 1.1740 currently.
– We expect a range today in the GBP/EUR rate of 1.1710 to 1.1810
Aussie and Kiwi Dollars: AUD/USD and NZD/USD are steady this morning. They open at .9900 and .7400 respectively. In fact it has been a pretty dull last 24 hours. Local traders might just be watching the cricket. There has been no Australian or New Zealand data released overnight and global markets have done little. If anything the USD is slightly weaker owing to weaker treasury yields. We can probably expect more of the same today. GBP/AUD and GBP/NZD are also steady and trade at 1.5800 and 2.1130 respectively.
– We expect a range today in the GBP/AUD rate of 1.5710 to 1.5860
– We expect a range today in the GBP/NZD rate of 2.1040 to 2.1210
