Pound news:
As we head into the weekend the performance from the Pound over the last 5 days has not been particularly spectacular. Against the euro we have gradually slipped under €1.2000, last seen on Wednesday, to currently trade at €1.1956. This has been due to euro strength rather than Sterling weakness but even so holding above €1.20 would have been nice to see. Unfortunately last week’s high of €1.2385 was a flash in the pan, another 4 cent move higher is going to take some time or hugely unexpected news.
Against the dollar trading has been very flat, GBP/USD prices have been holding within the $1.51 area for some time. The high of the day is just shy of 2pips off $1.52 but so far there is little to drive Sterling higher. Generally speaking the trend for Sterling dollar has been upwards but the moves higher have been very gradual with Sterling still being sold on the rallies.
Yesterday was a disappointing day for data, the house price index came in down -0.6% when the market was looking at 0.6% to the good. This was then followed by weak manufacturing data, market was looking for a 0.4% gain but 0.3 was all that could be managed. Today is another busy day with a number of key figures to be released, Producer Price Index (change in the price of goods and raw materials purchased by manufacturers) is out at 09:30, as is the trade balance.
US Dollar news:
As the markets readjusted their views on the euro and the global recovery the dollar came under some heavy pressure, namely from the euro as the single currency touched a 2month high of $1.2713. Subsequently the euro has dropped slightly but the current EUR/USD price of 1.2697 is a very positive sign of market confidence for the euro zone. Sterling was a little more subdued and held a $1.51 level, this morning
Sterling starts 0.10% up on the dollar but overnight trading has been kind to the Pound as we are in the upper ranges of $1.51 at $1.5180 and looking to test $1.52. The commodity lead currencies are taking a slight break from the rally on the dollar. As it stands Canadian Dollar, Australian Dollar and New Zealand Dollar are all lower on the day but the moves down are negligible. The Canadian dollar is -0.07% lower and looks to be trading either side of $0.9600 for the day.
In better news for the U.S economy unemployment claims were lower by 7,000, a welcome relief for the Obama administration as high unemployment is seen to be a troublesome issue. There is no macroeconomic news for the U.S today but Canadian employment change and unemployment rate figures are both out at 12:00 London time.
Euro news:
The euro has continued its rally on the dollar and by doing so has quite probably embarrassed a number of traders who shorted the euro. A current price of above $1.2680 and testing $1.27 as we look at it is a far cry from a dip to $1.15 as predicted a month ago. The next marker for the euro is the end of July when the result from the Stress Test on the banks is revealed. Something tells me the results will be positive regardless of the outcome in order to calm the markets for once and for all. “Once we’re through all that (the test results), we’ll have a pretty good understanding of whether the euro” is going to fall back toward the more-than-four-year low it hit in June of $1.1876, or whether it will extend toward $1.30, said Chuck Butler, president of EverBank World Markets in St. Louis.
For the day so far the euro would have gained some support from French industrial production, month on month output was up 1.7% when the market was looking for just 0.3%. This has then been followed by stronger Italian industrial output, up 1% on forecasts of 0.7%.
Quote of the Day
“Weekends don’t pay as well as weekdays but at least there’s football”. – S.A. Sachs