Sterling gains ground across the board | Smart Daily Currency Note

Sterling

Sterling performed strongly yesterday, gaining sharply on both the euro and the US dollar. This was thanks largely to strong services Purchasing Manager Indices (PMI) data, showing the sector had expanded in July greater than expected. These results added to signs that the economic recovery is gathering pace, and was duly reflected in the strength of the currency. This being said, the market will remain little tentative before hearing the inflation statement from Governor of the Bank of England this coming Wednesday, where he will outline plans for forward guidance on interest rates. Before this, today see's the release of UK monthly manufacturing production data, and as such could see further movement for the currency. Call your trader today for the latest prices on sterling during an important week for it.

Euro

Yesterday was a relatively quiet day for the euro as it responded to mixed data. The seventeen-nation currency lost ground sharply against sterling in response to sterling strength and weakened slightly against the US dollar. Eurozone investor confidence data came through significantly worse than expected during the morning spurring a moderate decline, however the day's other key data sets were largely positive and caused the euro to steady throughout the rest of the day. Spanish and Italian Services PMI data, which while both indicating a contraction, were revealed to be marginally better than expected. Similarly, monthly retail sales figures were down, but not by quite as much as predicted. This morning, euro performance may be affected by Italian second quarter preliminary growth figures as well as German monthly factory orders data. With more positive economic news emanating from the US and UK, traders will need to see some signs of economic recovery in Southern Europe in order for the euro to keep pace with its major trading partners. Call your trader now to keep track of euro performance.

US dollar

Yesterday was a mixed day for the US dollar, falling against sterling and the Japanese yen. Losses for the currency, however, were curtailed thanks to non-manufacturing PMI data released, showing that the service industries in the US had expanded ahead of expectations. At the same time, gains were seen for the currency against the Euro. Speculation on when the Federal Reserve will begin their tapering program still occupies investors, and will continue to affect the performance of the currency – especially in light of comments from one of the members of the Federal Reserve who yesterday suggested that the central bank should start to taper in September. Today's most important release for the currency will be the trade balance, due out at 1.30pm, and this will likely have a noticeable impact on the strength of the currency, while later on this afternoon another member of the Federal Open Market Committee is speaking. Get in touch with your trader today to get the latest price on the US dollar.

Worldwide

Elsewhere, eyes were on the Antipodean nations, where both the New Zealand and Australian dollars struggled yesterday. In New Zealand the slide was a response to Fonterra Group, the New Zealand-based, world's-largest milk exporter, confessing that a recent batch of exports were infected with a deadly bacteria. This in turn lead to China and Russia imposing import halts on all dairy products coming out of New Zealand. With the dairy industry accounting for some 25% of New Zealand's total exports, the news had a marked impact on the trade-reliant nation's currency. The Australian dollar also struggled, sliding to near three-year lows against the US dollar. The slide was attributed to retail sales coming in worse-than-forecast, boosting odds for interest rate cuts being implemented by the Reserve Bank. Overnight we saw the Reserve Bank of Australia cut interest rates by 0.25% and we saw a slight rebound in the value of the Australian and New Zealand dollars but these gains could be short lived as their problems seem to be growing. The Japanese yen performed well yesterday, as investors bought in to the safe-haven currency following uncertainty in the markets – pushing the yen up to four-day highs against the US dollar. Today, we have influential trade balance data out of Canada, and late this evening we have quarterly unemployment data out of New Zealand. Get in touch for the latest rates.

Sterling strengthens late Friday, will it continue? | Smart Daily Currency Note

Sterling

Sterling had a strong end to the week on Friday, with construction data from July coming in considerably better than expected, hitting the highest level in over three years. These figures, coming off the back of strong manufacturing data on Thursday, meant that sterling logged some notable gains at tail end of the week. These gains were extended against the US dollar as worst-than-forecast employment figures out of the US pegged back the nation's currency. Considering the strong data out of the UK, sterling did not advance as much as it might have done and traded in a fairly narrow range as traders look ahead to this week's Bank of England inflation report. Wednesday will see the UK central bank Governor “respond to the Chancellor’s request for its assessment of the use of thresholds and forward guidance” during which he could indicate that interest rates will stay at record lows for a prolonged period. Sterling is likely to be under scrutiny and probably pressure for much of this week given the uncertainty surrounding what will be said. We also have services PMI data released today, inflation data on Tuesday and more manufacturing data on Wednesday. It promises to be an interesting week for sterling, so get in touch for the latest rates.

Euro

The euro struggled on Friday and only really made notable gains against a weak US dollar. Data released from Spain showed that the number of people without a job had fallen in July for the fifth month in a row, albeit by less than had initially been anticipated. Despite this drop, the International Monetary Fund suggested that unemployment in Spain would remain “above 25 per cent to 2018”. Services PMI figures released this morning for the Eurozone will be watched closely by investors who will hope for a positive reading following the better than expected manufacturing PMI figures released last week. It is a busy week for Germany with factory orders, industrial production and trade balance data all scheduled to be released. Other notable releases includes the preliminary Italian growth figures and the monthly bulletin from the European Central Bank. Call your trader now for the latest on the euro.

US dollar

Friday rounded off a volatile week for the US dollar, with another day of big movement. Early in the day the US dollar enjoyed slight gains following data released on Thursday showing a fall in jobless claims, before seeing these gains wiped out as it plummeted, losing ground quickly over the day against most of its major trading partners. This trend was set after the non-farm payrolls data came our much lower than expected, detailing growth of 162'000 in July versus forecasts of 185'000 - the lowest number since March. Moreover, last moths figures were also revised lower. As such, expectations that the Federal Reserve would start tapering by starting any time soon were lowered, as they have stated this would only be considered if significant improvements were seen in the labour market, and as such will want to see more sustainable growth in this area before implementing this. Important data due this week for the US dollar includes non-manufacturing PMI, the trade balance, and further unemployment data in the shape of the weekly unemployment claims figures, all of which could see a reaction from the US dollar rates. Call your trader today for the latest price on the Dollar.

Worldwide

Elsewhere, the Canadian dollar's slow week continued into Friday and it will remain in focus this week with a raft of data released including trade balance figures, unemployment statistics and PMI data. The South African rand fell through the psychological level of 10 to the dollar in early trade on Friday amid upbeat expectations for US jobs data. The worse-than-forecast results from the US sparked a response from the rand, and we saw a strong end to the week from the South African currency. The Australian dollar held three-year lows throughout Friday, as markets remained tentative ahead of Tuesday's interest rate decision and the increasing likelihood of a cut. Also out of Australia this week we have trade balance data, unemployment figures on Thursday and there is another statement from the RBA on monetary policy early Friday morning. It is an important week for Japan with current account figures, the monetary policy statement and the Bank of Japan press conference that follows. A big week for data, so get in touch for the latest rates.

Poor week for sterling | Smart Daily Currency Note

Sterling

Sterling performed poorly during the early part of this week, notably reaching a four month low against the euro and experiencing consistent losses against the US dollar. The only real negative data coming from the UK has been data from the British Retail Consortium showing that average retail prices had dropped for the third month in a row. The cause of the slide was market speculation ahead of yesterday's Bank of England rate setting meeting. Investors faith in sterling weakened as the possibility of the central bank taking further measures to loosen monetary policy. However, sterling strengthened against the euro and US dollar yesterday as the statement revealed that the £375 billion asset-purchasing target is to remain constant, as is the 0.5% interest rate. On the topic of forward guidance on interest rates, the central bank said that in next week’s inflation report it would “respond to the Chancellor’s request for its assessment of the use of thresholds and forward guidance” which means next Wednesdays release will be of greater importance than normal. Sterling also benefited from better than expected manufacturing data, which is encouraging given that manufacturing growth has been sluggish since the recession. This morning, data from the construction sector is being released and we may see sterling show further signs of appreciating if the figures seen can replicate those for the manufacturing sector. Call your trader now to see if the sterling slide continues.

Euro

Despite getting off to a quiet start in this week, the euro reached four month high against the sterling. No significant data was released, although consumer confidence across the euro zone was at a 15 month high along with data showing that unemployment rates across the region throughout June had fallen for the first time in two years. Markets were tentative in anticipation of yesterday’s Central Bank's rate decision and statement that followed, the major affecting event of the week. As expected, interest rates were kept on hold, but the comments from the President of the European Central Bank that followed did cause some volatility in the market. Whilst suggesting that the worst was over for the Eurozone, the President did provide forward guidance on interest rates as he stated that rates were “to remain at present or lower levels for an extended period of time” and said that “expectations of rate hikes in money markets are, according to our assessment, unwarranted.” The other significant release yesterday was the manufacturing data which came in above market estimates but did little to effect the relative strength of the euro. Today, Spanish unemployment and Producer Price Index data will be the main points of interest for the Euro. Call your trader now for the latest on the euro.

US dollar

A strong start to the week for the US dollar as better than expected Pending Home Sales data increased speculation that the Federal Reserve would taper bond-buying this Autumn. Whilst the figures did reveal a decline, the decline was not as big as expected after reaching the highest level in over six years in June. On Wednesday, despite better-than-forecast GDP data, the US dollar experienced high levels of volatility across the board and movements in both directions as traders held their collective breath ahead of the evening's statement from the Federal Open Market Committee. Traders had been speculating the statement might reveal further clarity regarding the so called tapering of the Federal Bank’s bond buying program. However, no such details were given and the committee stated that it was “prepared to increase or decrease” its bond buying program where necessary, whilst stating that deflation could hard harm the US economy. Gains were seen yesterday in response to more convincing economic data. Both unemployment and manufacturing data from the US were better than expected which fuelled speculation once again that the central bank could taper its monthly asset purchases at some point this year.  Looking ahead to today, we have the highly influential non-farm payrolls data released. Given the rhetoric from the Federal Bank that tapering would only be considered when the labour market has shown significant improvements, this release is likely to cause volatility in the market. Additionally, a member of the Federal Open Market Committee is speaking in the afternoon and will comment on future policy deliberations. Call your trader now to see how the latest data is received.

Worldwide

Elsewhere, it has been a difficult week for the Australian dollar following comments from the Governor of the Reserve Bank of Australia which eluded towards a rate cut at the next policy-makers' meeting. Following the comments, the Australian currency fell against all of its 16 most-traded peers, and to the weakest level in three years against is US counterpart. Tapered growth forecasts out of China combined with a general softness in the global commodities market has piled further pressure on the export-based economy. After a strong start to the week, logging substantial gains off the back of high oil prices, the Canadian dollar dropped off on Wednesday and Thursday following worse-than-forecast growth figures, and amid speculation the Federal Reserve will taper monetary stimulus. As Canada's biggest trade partner, a tightening of monetary policy in the US would have a marked impact on the Canadian economy. On Tuesday we saw the Indian rupee lose ground against all of its 31 most-traded peers, and hit 10-year lows against sterling. The big shift was in response to the central bank keeping interest rates unchanged and saying that steps taken to tighten cash supply this month will be rolled back. Overnight we saw the release of quarterly inflation data from Australia, but little else is expected to be released today. Get in touch for the latest rates. 

Sterling slides, will Mark Carney make it worse? | Smart Daily Currency Note

Sterling

The sterling slide continued yesterday as data from the British Retail Consortium showed that average retail prices have dropped for the third month in a row. The poor data in combination with a continuation of the decline in support for sterling ahead of today’s MPC statement has caused sterling to drop to a four and a half month low against the euro and a two week low against the US dollar. Whilst we are unlikely to see any change in the rate of quantitative easing or an alteration in interest rates this month, speculation is rife that the new Governor will use the meeting to provide further forward guidance with regards to how long interest rates will be kept at its historic low. Sterling has been sold off in anticipation of this move, as a result, if no such guidance is given, you would expect the trend to snap and sterling to appreciate. Call your trader now to see how the statement is received.

Euro

It was yet another good day for the euro yesterday, logging slight gains against the majority of its most traded peers and its consistent strong performances shown by the euro over the past 10 days meant the euro hit 4-month highs against sterling. Yesterday's euro strength was attributed to data showing unemployment rates across the region throughout June had fallen for the first time in two years. The single currency has taken support over recent sessions, after a string of positive data suggests that the bloc may be transitioning out of the recession it entered back in 2011. Today will no doubt be a very interesting one for the euro. The interest rate decision at 12.45pm will be closely followed by the European Central Bank’s (ECB) press conference where traders will look for clues towards future interest rate decisions, especially in light of the comments made by the President of the ECB last month where he stated that “interest rates will remain at present or lower levels….for as long as necessary." Get in touch for news and live rates.

US dollar

The US dollar reacted to positive data during the day yesterday as the second quarter advance GDP figures came our much better than expected showing growth of 1.7% for the world largest economy – much greater than the 1.1% initially forecast. More positivity came as employment data came in better than expected, leading to analyst predicting that Fridays’ highly influential Non-Farm payrolls data could also be positive. The US dollar experienced high levels of volatility across the board and movements in both directions as traders held their collective breath ahead of the evening's statement from the Federal Open Market Committee. Traders had been speculating the statement might reveal further clarity regarding the so called tapering of the Federal Bank’s bond buying program, however, no such details were given and the committee stated that it was “prepared to increase or decrease” its bond buying program where necessary, whilst stating that deflation could hard harm the US economy. As traders continue to evaluate the more long-term implications of last night's release, the dollar may be affected by further economic data that is coming out today. Weekly data detailing the number of first time unemployment claims made is being released this afternoon as well as Manufacturing Purchasing Managers Index data. Both of these are key economic indicators so call your trader now to see how markets respond as they continue to deliberate on the future course of US economic policy.

Worldwide

Elsewhere, following Tuesday's decline, the Australian dollar weakened further against it's major partners, hitting fresh 3-year lows, due to continued speculation that the Reserve Bank of Australia would cut interest rates next week. Elsewhere, the Canadian dollar first fell following lower than expected monthly growth figures, before rallying to reverse this trend and ultimately gain on all of it's major partners, thanks to encouraging signs of a US recovery. No more data is due from Canada this week, although signs of recovery in the US would in turn benefit the country's currency. Another big mover worldwide was the South African rand, which fell against its 16 most-traded partner currencies, despite the country's trade gap deficit narrowing in May to 7.7 billion rand ($775 million) from 11 billion rand. The rand weakened along with a number of emerging market currencies as the markets become nervous that the Federal Bank could start to taper off its quantitative easing program. Overnight we saw the release of Manufacturing PMI from China and later this evening sees the release of the Producer Price Index from the Australia, which could have an impact on the currency.  Call your trader now for the latest prices in world currencies.

Sterling under pressure | Smart Daily Currency Note

Sterling

It was a torrid day for sterling yesterday as it lost ground for the sixth day straight against the euro and experienced its greatest depreciation in two weeks against the US dollar. Traders seem to be betting against sterling ahead of tomorrow’s Monetary Policy Committee’s (MPC) meeting. Expectations are that the Bank of England will be relatively proactive in their policy decisions when compared to their counterparts in the US and the Eurozone. Whilst it seems unlikely that we will see an increase in quantitative easing at this stage (all 9 members voted against an increase last month) and the MPC has already expressed a commitment to keep interest rates low for the foreseeable future, investors will be paying close attention to the forward guidance issued as they look for hints as to what policy adjustments we can expect as we approach the autumn. The release will be key in determining sterling’s performance in the near future with a number of key figures predicting further sterling weakness. There is little in the way of important economic releases emanating from the UK today, however you can expect sterling to remain under pressure in the run up to Thursdays announcement. Call in now to track on-going market volatility ahead of Thursday's events.

Euro

A further batch of positive data out of the euro zone meant that the euro logged another generally positive day, adding to the gentle momentum that the 17-nation currency has been building. Data released yesterday showed consumer confidence across the euro zone hit the highest levels in 15 months in July, reaching a rate of 92.5, up from 91.3 in June. The most notable results were seen in Germany, where levels were at the highest seen since September 2007. This continuing evidence suggests that the worst of the European recession has passed and is henceforth taking pressure of the European Central Bank to increase its easing policies. Today we have the release of monthly European inflation data, as well as unemployment statistics. Although the data is important, markets will have one eye firmly on Thursdays ECB meeting. Get in touch for the latest euro rates.

US dollar

The US dollar remained flimsy yesterday ahead of a very data-heavy few days for the world's largest economy. The dollar did strengthen against a weak sterling and spiked briefly against the euro before quickly relinquishing the ground it had made. Following the previously cautious approach from the Chairman of the Federal Bank with regards to the tapering back of the US bond-buying programme, investors appear reluctant to back the dollar before this evening's Federal Open Market Committee statement. Should the Chairman’s comments suggest that a tapering back in the near future is likely then expect to see the dollar strengthen significantly, however it may continue to struggle if we see further hesitancy and commitment to an accommodative monetary policy. Tomorrow also sees the release of employment data alongside quarterly Advance GDP data during the afternoon. Changes in monetary policy will only be affected in response to an improvement in economic conditions and the second quarter GDP figures are sure to play a key part in this. Call your trader now to see if the Federal Reserve can spark a change in US dollar fortunes.

Worldwide

Elsewhere, a big mover yesterday was the Australian dollar. A statement from the Governor of the Reserve Bank of Australia eluded towards a rate cut at the next policy-makers' meeting, scheduled for the 6th of August. Following these comments the Australian currency fell against all of its 16 most-traded peers, and to the weakest level in three years against is US counterpart. The Indian rupee lost ground against all of its 31 most-traded peers, and hit 10-year lows against sterling. The big shift was in response to the central bank keeping interest rates unchanged and saying that steps taken to tighten cash supply this month will be rolled back.  The Swedish krona also struggled yesterday after GDP data showed that the Scandinavian economy had contracted unexpectedly over the last quarter. Despite the news, markets remain confident that Sweden will recover in the coming months, with the economic situation in the euro zone, an important export destination, starting to show signs of life.  Overnight we saw business confidence data out of New Zealand, and later on today we will have monthly GDP data out of Canada. Get in touch for live rates.

Sterling slips as we await Thursdays BoE meeting | Smart Daily Currency Note

Sterling

Sterling had a poorish day yesterday, weakening against the US dollar and against the euro. Positive data from the Confederation of British Industries revealed the first rise in UK retail sales for 5 months, benefitting sterling in the morning. Whilst these figures were better than expected, overall sales volumes are still relatively low and growth is expected to slow in August so the effect of this data was limited. Sterling fluctuated to a degree during the rest of the day, largely in response to events elsewhere. The Monetary Policy Committee's August statement released on Thursday is likely to be the most influential release of the week as traders look to assess how much credence to give the notion of a sustainable recovery in the UK. Any hints as to alterations in monetary policy will impact significantly on Sterling performance as traders look to the statement for an indication of intent. There is little being released in the way of influential UK data between now and then so investor speculation and events elsewhere are likely to drive market movement. Call your trader now to monitor sterling performance.

Euro

A quiet day for the euro yesterday. Markets are tentative ahead of the Central Bank's rate decision on Thursday, and with no significant releases of data, the euro held ground against the majority of its peers. It lost ground against the US dollar, however, as markets speculate that the Federal Reserve will possibly announce plans to reduce stimulus later this week. Today should see a little more movement from the euro, with retail data coming out of German acting as a good inflation indicator, and quarterly GDP data coming out of Spain. However, expect markets to continue on a cautious note as we look towards Thursday's rate decision.

US dollar

The US Dollar appreciated against most of its major trading partners yesterday afternoon in response to better than expected Pending Home Sales data and increased speculation that the Federal Reserve will taper its bond-buying programme this autumn. Whilst the figures did reveal a decline, this decline was not as big as expected after reaching the highest level in over six years in June. Speculation surrounding a reduction in asset-purchasing came following better economic data and more positive data will further contribute to this trend. Crucially, the Federal Open Market Committee's statement on Thursday is likely to go some way to encourage or discourage further speculation to this effect. In the meantime this afternoon's Consumer Confidence data, another leading indicator of economic health, is likely to cause short-term market movement if figures differ greatly from expectations. Call your trader to see whether the dollar comeback is imminent.

Worldwide

Elsewhere, the Canadian dollar had another strong day yesterday, rising for the third consecutive day and climbing against the majority of its major peers. The strong performance was down to crude oil, the nation's biggest export, trading above $100 a barrel for the 18th day in a row. The performance is concluding a strong month for the Canadian currency, which has logged gains of 2.5% against its US counterpart this month. The Japanese yen was also a standout performer, with a 3% plunge in the Japanese stock index leading to a hike in demand for the safe haven currency. Strong monthly retail sales were also a catalyst for the yen's strong performance. The New Zealand dollar struggled yesterday, losing out against the majority of its most traded peers, as the Prime Minister, John Key, claimed that it was 'overvalued' and that the government would welcome a slide. Overnight eyes were on Australia, with monthly building approvals statistics being followed by a statement from the central bank governor. Later today we have monthly raw material prices data out of Canada, a good overall inflation indicator. Get in touch for live rates.

Sterling faces uncertain week | Smart Daily Currency Note

Sterling

Sterling experienced a fairly steady day on Friday in the absence of any real data of note being released. Looking ahead to this week, all eyes will be on Thursday as the Bank of England will meet for the second time with Mark Carney as the new Governor. Last week there was increased speculation that we could see a possible change of stance with regards to monetary policy so traders will be watching even more closely than usual. The markets will likely be nervous in the run up to the release and then we could see big moves once the Monetary Policy Committee have announced any changes or lack there of. Further commitment to keeping interest rates at 0.5% or any increased likelihood of an increase in asset-purchasing will likely cause sterling to depreciate sharply. Manufacturing Purchasing Managers Index (PMI) data is also released on Thursday before the announcement from the Bank of England so could create increased volatility first thing . We have seen moderate growth in the manufacturing sector during the last two months, however recovery has been far from convincing and this data will have an effect on faith in a sterling recovery. Finally, Construction Purchasing Managers Index figures will be released on Friday and have a similar capacity to affect performance. Call in now to see how market chatter affects the pound ahead of key releases on Thursday.

Euro

The euro ended last week on a high, holding the gains it had achieved against its main trading partners earlier in the week. The euro's performance on Friday was unaffected by slightly lower-than-forecast German import price data which showed that prices had fallen by 0.8% from May to June. Following some slightly more positive data emanating from Europe last week which caused the euro to gather a head of steam, the general sentiment is a tentative growth of confidence in the market but it will be looking towards the the European Central Bank's (ECB) monthly decision on monetary policy on Thursday. Before then, we have unemployment data out of Germany, and manufacturing data out of Spain and Italy. Call in for news and live rates on the euro.

US dollar

The US dollar traded in a fairly narrow range on Friday in absence of any significant market release. Revised Consumer Sentiment figures came in marginally better than expected, but had only caused slight variation for the dollar.  We have a raft of employment data released this week with the the headline release being the non-farm payrolls data released on Friday which has caused a great deal of volatility in the past - especially in light of the Federal Banks rhetoric that monetary policy will stay loose until the labour market shows significant improvement. This rhetoric will be scrutinised to a greater extent when the Federal Open Market Committee (FOMC) meet on Wednesday. Traders hope that the FOMC statement could well give greater clarity as to when the tapering of its asset purchasing program may begin. Advance second quarter GDP figures, which also come out on Wednesday, are estimated to show growth of 1.1% although some key figures have expressed more pessimistic views following the inconsistent run of economic data that we have seen from the US recently. Other data released this week includes figures showing the number of homes pending sale, consumer sentiment statistics and manufacturing PMI. An extremely busy week for the US, so call your trader now to see if the dollar can start to make up some of the ground it has lost.

Worldwide

Elsewhere, Friday saw the Japanese yen end a seesaw week on a high, as a drop in Asian stock market confidence boosted demand for the safe haven currency.. The Australian, New Zealand and Canadian dollars all performed well as traders bet that the Federal Bank will not tighten monetary policy at its meeting this week. Tonight we will hear statements from the governors of both the Bank of Japan and the Bank of Canada and building approvals data from Australia which could well cause significant market movements in the market for the respective currencies.. Other data this week includes  business confidence figures from New Zealand, inflation data out of Australia and monthly GDP data out of Canada which is expected to show growth of 0.2% . Get in touch for the latest rates.