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United States Dollar:GBP/USD fell back from the 1.68 level yesterday, this after trading to a post-FOMC high of 1.6819. It traded to a low of 1.6757, having been largely unaffected by the BoE monetary policy announcement yesterday. As expected, the central bank left interest rates and QE unchanged, and governor Carney chose not to make any accompanying comments. US economic data was generally positive: jobless claims decreased to their lowest level since May 2007, import prices m/m rose beyond forecasts and the Fed budget deficit narrowed by more than expected. It didn’t stop the USD sell-off though and the dollar continued to trade with a soft tone throughout the day, although this wasn’t necessarily the case vs. the pound. GBP/USD opens this morning at 1.6770. US inflation data is due and will be eyed closely whilst G20/IMF meetings continue.
We expect a range today in the GBP/USD rate of 1.6690 to 1.6820.
Euro:Greece held a very successful bond auction yesterday selling €3bn of 5-year bonds at 4.95%, below the 5.25% target. EUR/USD broke higher on the news. Weaker than expected inflation data was largely shrugged off, as investors were more concerned with shorting the dollar after the dovish FOMC minutes the previous evening. Meanwhile, the ECB and Bundesbank’s Jens Weidmann spoke on CNBC yesterday, saying that “Mario Draghi made this point pretty clear in his last press conference. We do believe that the deflationary risks are pretty limited so we portray an outlook for the inflation rates that expects a gradual recovery and this recovery will also be reflected in gradually rising inflation rates”. This supported EUR/USD, as the pair pushed through stops in the high 1.38s. It traded to an overnight high of 1.3904. German inflation data was released this morning and printed in line with expectations – the euro has been unmoved. ECB President Draghi is due to speak this weekend on a visit to Washington DC and his words may have an impact come Monday morning when markets re-open.
We expect a range today in the GBP/EUR rate of 1.2040 to 1.2120.
Aussie and Kiwi Dollars:After making solid gains all week, AUD/USD has settled back overnight to open this morning at .9390 – this after falling to a low of .9360 earlier on this morning. Possible reasons for this were weaker than expected Chinese inflation data and comments from the PBOC’s Yi Gang that the bank would not take short-term stimulus measures. Moreover, there was an appetite to take profit on long AUD positions heading in to the weekend. NZD/USD has fallen overnight too and opens this morning at .8675.
We expect a range today in the GBP/AUD rate of 1.7800 to 1.7910.
We expect a range today in the GBP/NZD rate of 1.9240 to 1.9390.
Data releases for the next 24 hours:AUD: No data
EUR: No data
GBP: CB Leading Index m/m
NZD: No data
USD: PPI m/m, Prelim UoM Consumer Sentiment, Prelim UoM Inflation Expectations
We expect a range today in the GBP/USD rate of 1.6690 to 1.6820.
Euro:Greece held a very successful bond auction yesterday selling €3bn of 5-year bonds at 4.95%, below the 5.25% target. EUR/USD broke higher on the news. Weaker than expected inflation data was largely shrugged off, as investors were more concerned with shorting the dollar after the dovish FOMC minutes the previous evening. Meanwhile, the ECB and Bundesbank’s Jens Weidmann spoke on CNBC yesterday, saying that “Mario Draghi made this point pretty clear in his last press conference. We do believe that the deflationary risks are pretty limited so we portray an outlook for the inflation rates that expects a gradual recovery and this recovery will also be reflected in gradually rising inflation rates”. This supported EUR/USD, as the pair pushed through stops in the high 1.38s. It traded to an overnight high of 1.3904. German inflation data was released this morning and printed in line with expectations – the euro has been unmoved. ECB President Draghi is due to speak this weekend on a visit to Washington DC and his words may have an impact come Monday morning when markets re-open.
We expect a range today in the GBP/EUR rate of 1.2040 to 1.2120.
Aussie and Kiwi Dollars:After making solid gains all week, AUD/USD has settled back overnight to open this morning at .9390 – this after falling to a low of .9360 earlier on this morning. Possible reasons for this were weaker than expected Chinese inflation data and comments from the PBOC’s Yi Gang that the bank would not take short-term stimulus measures. Moreover, there was an appetite to take profit on long AUD positions heading in to the weekend. NZD/USD has fallen overnight too and opens this morning at .8675.
We expect a range today in the GBP/AUD rate of 1.7800 to 1.7910.
We expect a range today in the GBP/NZD rate of 1.9240 to 1.9390.
Data releases for the next 24 hours:AUD: No data
EUR: No data
GBP: CB Leading Index m/m
NZD: No data
USD: PPI m/m, Prelim UoM Consumer Sentiment, Prelim UoM Inflation Expectations