US Dollar news:
With the stress test results now priced into the market the dollar is little change this morning against the euro and Sterling. The euro is hovering around the 0.0% change mark for the day and maintaining a very strong level at $1.2990. So far the market is favouring the euro, a break to $1.30 may see the euro climb higher although those who are long EUR/USD may be looking for an exit point in order to book profits.
The percentage changes for Sterling are also negligible for the day, -0.03% down shows thin trading volumes for today against the dollar. Yesterday did see GBP/USD hit $1.55 briefly but we closed at 16:30 London time at $1.5492; opening this morning slightly lower at $1.5476.
The Canadian dollar has now edged into $0.97 with a 0.15% move higher for the day but again the relatively small movements show the currency pair has little direction. AUD and NZD are benefiting from a pickup in improved market sentiment and are edging out small gains on the USD. The major macroeconomic events now appear to be behind us and so attention turns to domestic fundamentals for the currencies.
The U.S dollar started the week on the front foot as new home sales came in at 330,000, up 13,000 on market expectations. 15:00 London time today sees Consumer Confidence figures released with the markets looking for a slight revision lower, naturally anything which betters that will give the dollar a boost.
Pound news:
Sterling appears to have found its levels at the moment as trading against both the euro and the dollar continues to occur within tight ranges. The major support from the improved GDP figures appears to be subsiding as Sterling is edging slightly lower against the euro. Last Friday saw Sterling push to €1.20 but since then we have gradually moved lower, ending yesterday at €1.1921. This morning shows a very marginal price change but unfortunately it reveals Sterling weakness as the Pound now trades at €1.1910 with €1.18 looming. It is worth looking back, albeit a couple of months, when Sterling fell fairly heavily in afternoon trading when a significant support level was breached. Traders gave no real reason for the fall except that market psychology resulted in a mild panic sell-off. A fall through to €1.18 may trigger a number of sell orders in the market, be aware.
Sterling is also moving lower against the dollar having hit $1.55 in yesterday’s trading. Maintaining $1.55 was asking too much from Sterling and as the equity markets shut Sterling was back at $1.5492. Whilst the Pound has held the $1.5450 level the price has moved lower from yesterday and a look at the markets would suggest Sterling is under a little bit of pressure today. On the macroeconomic front there is nothing of great significance today so the markets will be waiting for BoE Governor Mervyn King’s speech at 11:45 tomorrow morning.
Euro news:
Despite all the questions regarding the nature of the stress test the euro continues to outperform as the markets put their doubts to one side for the time being. No doubt the EU finance ministers will be looking to put this test behind them in order to hush those who still feel the euro zone is doomed. There are still those who are sticking by their original predictions but with the euro steadily moving higher on the U.S dollar the herd must the thinning. As luck would have it a snap shot of the market shows EUR/USD has just hit $1.3003 at interbank level. With the rest of the day’s trading to go it will be interesting to see where the euro goes from here and whether it has the momentum to hold above $1.30. The single currency has already received support this morning as German data has come in on the positive side. The data is not of huge importance but in reference to the euro zone, every little helps.
Quote of the Day
“To measure the man, measure his heart.” – Malcolm Stevenson Forbes