Sterling fell on Friday as data showed that the UK economy contracted by more than had initially been anticipated for the 4th Quarter of 2010. The 2nd estimate showed a contraction of 0.6% against the previous estimate of 0.5%. As a result, sterling slumped to a 3 week low against the euro and dropped against the US dollar. The correction left many analysts questioning whether interest rates would now be increased, but there is still an expectation that rates will be hiked by 0.25% before June. This should see sterling remain above or around $1.60 against the US dollar, but further negative data will have an impact and knock sterling. It is a quiet day for data today, but later in the week we have house price data and a wide array of PMI purchasing manager data which will give an idea of activity in the services, manufacturing and construction sectors so call in now for a live exchange rate.
In the euro zone, it seems that with all the focus the Middle East and North Africa, many have forgotten about the euro zone debt crisis. European leaders have been unable to find a solution still but talk of inflation and interest rates has kept the frenzied bond selling at bay for a few months. It is a big week in the region though, with the European Central Bank rate decision on Thursday and a number of bond auctions throughout the week which could cause the markets to remember all their concerns over peripheral European debt.
In the USA, tensions caused by uprisings and protests in the Middle East and North Africa have had a large effect on the price of oil and the US dollar did not follow ‘normal’ risk averse buying patterns. With concerns over the impact on US foreign policy of widespread upheaval in the Middle East, the Swiss franc was the major benefactor of last week’s tensions. In the USA, the big event of the week is Friday’s non-farm payroll figures so call in now for a live exchange rate.
Elsewhere, the Canadian dollar hit its strongest level against the US dollar in nearly 3 years as the country’s largest export – crude oil – posted the largest weekly price gain since 2009.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Monday, 28 February 2011
Friday, 25 February 2011
Sterling fell across the board on Thursday as a spike in oil prices saw investors look to safer haven currencies on concerns over the global recovery. As a result, sterling slipped to a 3 week low against the euro and dropped off Wednesday’s 3 week high against the US dollar. The pound was boosted on Wednesday following the Bank of England’s meeting minutes that showed an increased likelihood of an interest rate hike, but this rally soon ran out of steam as risk aversion saw global risk aversion and a move to safer currencies. Out later today we have a 2nd estimate of the recent GDP figures – this could cause some volatility, so call in now for a live exchange rate.
In the euro zone, the euro benefited from yet further talks from a key European Central Bank policymaker over interest rates. Axel Weber boosted prospects of a rate rise, stating that the only way for interest rates to go was up. Inflation in the region has been creeping up so, like the UK, markets now expect an interest rate hike in the coming months to deal with inflation. Out today we have some loan and spending figures.
In the USA, oil prices stayed around 2 ½ year highs as concerns over supply have seen the price shoot up. Whilst oil prices dipped slightly on reassurances from Saudi Arabia that it could counter the disruption to supply, tensions in the region have kept investors very concerned. The US dollar – especially US government bonds – have been in high demand as investors look for safe haven assets in times of geopolitical turmoil. Call in now for a live exchange rate.
Elsewhere, the Swiss franc has been a key benefactor of the Libyan crisis, with high demand for the traditionally safe currency. Despite all the talk of interest rate hikes in Europe and the UK, Switzerland might actually be closest to raising interest rates, so if you need to buy Swiss francs, we could see sterling drop much further in the coming months so call in now to avoid losing out.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the euro benefited from yet further talks from a key European Central Bank policymaker over interest rates. Axel Weber boosted prospects of a rate rise, stating that the only way for interest rates to go was up. Inflation in the region has been creeping up so, like the UK, markets now expect an interest rate hike in the coming months to deal with inflation. Out today we have some loan and spending figures.
In the USA, oil prices stayed around 2 ½ year highs as concerns over supply have seen the price shoot up. Whilst oil prices dipped slightly on reassurances from Saudi Arabia that it could counter the disruption to supply, tensions in the region have kept investors very concerned. The US dollar – especially US government bonds – have been in high demand as investors look for safe haven assets in times of geopolitical turmoil. Call in now for a live exchange rate.
Elsewhere, the Swiss franc has been a key benefactor of the Libyan crisis, with high demand for the traditionally safe currency. Despite all the talk of interest rate hikes in Europe and the UK, Switzerland might actually be closest to raising interest rates, so if you need to buy Swiss francs, we could see sterling drop much further in the coming months so call in now to avoid losing out.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Thursday, 24 February 2011
Sterling gained against the euro and US dollar yesterday as another member of the Bank of England’s monetary policy committee voted for an interest rate hike. Sterling hit a high of $1.6272/£1 – the highest since Feb 3rd – after Bank of England Chief Economist Spencer Dale joined Martin Weale and Andrew Sentance in calling for higher interest rates to deal with stubbornly high inflation. Consumer Price Inflation currently stands at 4% and there has been increasing speculation that the Bank would increase rates as soon as May. Higher interest rates mean higher return for investors holding sterling based investments and as such, demand for sterling increases and the pound strengthens. However, a 0.25% increase in the next 6-12 months is already priced in, so sterling is unlikely to break beyond $1.63/£1 or €1.19/£1 without a major boost from some other economic data. This is the best GBP/USD price in nearly a year, so if you need to buy US dollars, now is a great time. Such is the nature of foreign exchange that we could feasibly see some poor economic figures released that reverses the view on interest rates and we will back in the mid-$1.50’s.
In the euro zone, the euro had a fairly quiet day – supported against the US dollar by recent comments by European Central Bank policy makers over inflation in the region. Talk of interest rate hikes contrasts with the Federal Reserve’s relatively loose monetary policy, and as such the euro has held firm despite some serious global uncertainty in the shape of unrest and uncertainty in the Middle East and North Africa. Out today, there is no real data but still a lot of scope for volatility.
In the USA, turmoil in Libya has seen investors look to the safety of US government bonds and the Swiss franc on fears that a spike in the price of oil could impact the global recovery. Oil jumped over $100 per barrel as Libyan oil production shut down and fears over Middle Eastern oil supplies left investors concerned. Released today we have unemployment claims and new home sales data so call in now for a live exchange rate.
Elsewhere, a former Chinese central bank adviser called on East Asian economies to form an alliance to deal with the USA, especially on issues such as the USA’s fiscal deficit. China plays a key role in currency, and could be a huge issue over the coming months, so it is certainly worth keeping an eye on.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the euro had a fairly quiet day – supported against the US dollar by recent comments by European Central Bank policy makers over inflation in the region. Talk of interest rate hikes contrasts with the Federal Reserve’s relatively loose monetary policy, and as such the euro has held firm despite some serious global uncertainty in the shape of unrest and uncertainty in the Middle East and North Africa. Out today, there is no real data but still a lot of scope for volatility.
In the USA, turmoil in Libya has seen investors look to the safety of US government bonds and the Swiss franc on fears that a spike in the price of oil could impact the global recovery. Oil jumped over $100 per barrel as Libyan oil production shut down and fears over Middle Eastern oil supplies left investors concerned. Released today we have unemployment claims and new home sales data so call in now for a live exchange rate.
Elsewhere, a former Chinese central bank adviser called on East Asian economies to form an alliance to deal with the USA, especially on issues such as the USA’s fiscal deficit. China plays a key role in currency, and could be a huge issue over the coming months, so it is certainly worth keeping an eye on.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Wednesday, 23 February 2011
Sterling slipped against the ‘safer haven’ currencies yesterday as escalating tension in the Middle East and North Africa saw investors scale back holdings in riskier currencies. This saw sterling slip against the US dollar, Swiss franc and Japanese yen. The only real domestic news that caused any movement was speculation over the Bank of England’s minutes from their recent interest rate policy meeting. The minutes are released today at 9:30am and are important because investors hope to get a better picture of the Bank’s likely timescales for an interest rate hike – and whether any additional members joined the current two in voting for an interest rate hike. This is the big piece of UK data this week, so call in now for a live exchange rate.
In the euro zone, uncertainty over the situation in Libya – with a mounting public revolt in full swing – saw the euro suffer as a ‘risky’ asset, falling by 1% against the US dollar. However, positive comments by yet another European Central Bank member saw speculation over European monetary tightening start to gain momentum and the euro recovered lost ground against its counterparts. Yves Mersch was quoted as saying that the ECB should ‘change its language over inflation’. Out today, there is no real data and Bank president Jean Claude Trichet makes a speech later on.
In the USA, the rising tensions in Libya have pushed the price of Oil to a 2 ½ year high as concerns over the impact on global growth weighed on investors minds. Global stocks dropped by 1% and this saw large flows into the safe haven US Government bonds and as a result, US dollar strength. Out today, there is home sales data – the markets will be closely watching what is happening in Libya so call in now for a live exchange rate.
Elsewhere, the catastrophic earthquake in New Zealand had a serious effect on the currency. The NZ dollar fell almost 2 % against the US dollar hitting a 2 month low as investors sold the currency on concerns over the economic impact of the earthquake.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, uncertainty over the situation in Libya – with a mounting public revolt in full swing – saw the euro suffer as a ‘risky’ asset, falling by 1% against the US dollar. However, positive comments by yet another European Central Bank member saw speculation over European monetary tightening start to gain momentum and the euro recovered lost ground against its counterparts. Yves Mersch was quoted as saying that the ECB should ‘change its language over inflation’. Out today, there is no real data and Bank president Jean Claude Trichet makes a speech later on.
In the USA, the rising tensions in Libya have pushed the price of Oil to a 2 ½ year high as concerns over the impact on global growth weighed on investors minds. Global stocks dropped by 1% and this saw large flows into the safe haven US Government bonds and as a result, US dollar strength. Out today, there is home sales data – the markets will be closely watching what is happening in Libya so call in now for a live exchange rate.
Elsewhere, the catastrophic earthquake in New Zealand had a serious effect on the currency. The NZ dollar fell almost 2 % against the US dollar hitting a 2 month low as investors sold the currency on concerns over the economic impact of the earthquake.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Tuesday, 22 February 2011
Sterling hit a high of $1.6260/£1 yesterday, but struggled to push much higher as investors took profit from sterling’s recent run against the US dollar. Positive comments from a key Bank of England policymaker helped support sterling, as Martin Weale (who voted for an interest rate hike last month) stated that a small interest rate rise now would reduce the need for a large rise at a later date. Whilst the prospect of an interest rate hike helped support sterling, markets are waiting for Wednesday’s Bank of England minutes to see if any other of the 9 strong committee joined Andrew Sentance and Martin Weale in voting for an interest rate hike this month. It is worth noting that a lot of the current interest rate hike speculation is already ‘priced in’ (i.e. reflected in the exchange rate already) and as a result, there could be no real movement. We are at the highest level against the US dollar for nearly a year, so it is a good time to take advantage.
In the euro zone, the euro slipped yesterday following risk aversion relating to the escalating tensions in the Middle East and North Africa. In times of geo-political turmoil, investors generally look to safe haven currencies. As a result, the Swiss franc has seen some strength against the euro today. However, the euro did see some support from strong fundamental data, with German business confidence hitting a record high and purchasing managers’ data beating expectations. Call in now for a live exchange rate.
In the USA, with the markets closed for a bank holiday, there was no real data impacting the price. With the increase in violence in the Middle East and Libya in particular, oil prices have jumped to a 2 ½ yr high – which you would expect to see correlated with US dollar strength. However, what we have seen recently is US dollar weakness with the current situation as investors worry over the future impact on US foreign policy of massive upheaval in the region. Interesting times, so make sure you are on top of any upcoming payments.
Elsewhere, the Australian dollar has remained resilient despite moves by China over the weekend to rein in inflation and reduce monetary supply. China’s moves have been greeted with relief by many rather than panic, and with Australian economic fortunes closely linked to China’s economic demand, a move to address an expanding bubble is a sensible move by the Chinese.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the euro slipped yesterday following risk aversion relating to the escalating tensions in the Middle East and North Africa. In times of geo-political turmoil, investors generally look to safe haven currencies. As a result, the Swiss franc has seen some strength against the euro today. However, the euro did see some support from strong fundamental data, with German business confidence hitting a record high and purchasing managers’ data beating expectations. Call in now for a live exchange rate.
In the USA, with the markets closed for a bank holiday, there was no real data impacting the price. With the increase in violence in the Middle East and Libya in particular, oil prices have jumped to a 2 ½ yr high – which you would expect to see correlated with US dollar strength. However, what we have seen recently is US dollar weakness with the current situation as investors worry over the future impact on US foreign policy of massive upheaval in the region. Interesting times, so make sure you are on top of any upcoming payments.
Elsewhere, the Australian dollar has remained resilient despite moves by China over the weekend to rein in inflation and reduce monetary supply. China’s moves have been greeted with relief by many rather than panic, and with Australian economic fortunes closely linked to China’s economic demand, a move to address an expanding bubble is a sensible move by the Chinese.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Monday, 21 February 2011
Sterling hit a 2 week high against the US dollar on Friday as retail sales in January came in far higher than expectations. After a disappointing Christmas period, and with January retail sales normally coming in lower, the rise of 1.9% encouraged investors to back the pound. Sterling’s fortunes are very much linked to inflation and interest rate expectations. Higher retail sales figures left many feeling that the Bank of England will need to address the 4% inflation level far sooner than current rhetoric is suggesting. Out this week we have the Bank of England’s minutes that will be closely watched for any hint of timescales for an interest rate hike, so call in now for a live exchange rate.
In the euro zone it was a similar story with the single currency breaking above $1.37 against the US dollar to post the first weekly gain since late January. The euro’s strength came as European Central Bank policymaker Lorenzo Bini Smaghi said that the ECB would hike interest rates if price pressures continued to grow. As in the UK, this saw increased speculation over rate hikes in the region and the single currency strengthened. Out this week we have a wide array of European data so call in now for a live price as we could see some volatility.
In the USA, the US dollar had a poor end to the week, falling against the euro and sterling on interest rate expectations. The US dollar was not helped either by geopolitical concerns in the Middle East, with concerns over Iranian warships in the Suez Canal seeing concern. It is a bank holiday in the USA today, so there was a fair amount of US dollar selling going into the long weekend that also saw the currency weaken. This week sees consumer confidence and home sales figures so get in touch to ensure you are protected.
Elsewhere, China raised the level of required bank reserves to a record 19.5% in order for banks to lock up more cash to combat rapid inflation in the country. It is another move by Beijing to combat inflation and further moves – especially on interest rates are likely to be taken.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone it was a similar story with the single currency breaking above $1.37 against the US dollar to post the first weekly gain since late January. The euro’s strength came as European Central Bank policymaker Lorenzo Bini Smaghi said that the ECB would hike interest rates if price pressures continued to grow. As in the UK, this saw increased speculation over rate hikes in the region and the single currency strengthened. Out this week we have a wide array of European data so call in now for a live price as we could see some volatility.
In the USA, the US dollar had a poor end to the week, falling against the euro and sterling on interest rate expectations. The US dollar was not helped either by geopolitical concerns in the Middle East, with concerns over Iranian warships in the Suez Canal seeing concern. It is a bank holiday in the USA today, so there was a fair amount of US dollar selling going into the long weekend that also saw the currency weaken. This week sees consumer confidence and home sales figures so get in touch to ensure you are protected.
Elsewhere, China raised the level of required bank reserves to a record 19.5% in order for banks to lock up more cash to combat rapid inflation in the country. It is another move by Beijing to combat inflation and further moves – especially on interest rates are likely to be taken.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Friday, 18 February 2011
The rollercoaster ride for sterling continued yesterday, as a speech by Bank of England policymaker Andrew Sentance reignited speculation over interest rate hikes. As a result, sterling strengthened back up against the US dollar and euro. Sentance, who has been calling for an interest rate hike since June 2010, made it clear that there are numerous risks that will add to inflation and as such, interest rates need to rise faster than many think in order to filter through to the real economy and keep inflation on target. The constant back and forth over interest rate expectations is causing sterling movement on a day by day basis as sentiment shifts between swift interest rate hikes or no action from the Bank of England. Any feeling that interest rates will rise soon sees sterling strength and expectations that policy will remain unchanged will see sterling fall. Today, there are retail sales and mortgage data which is potentially market moving. Next week, the Bank of England’s minutes from last week’s meeting will be closely watched.
In the euro zone, reminding us that inflation is not just an issue faced by the UK, German producer price (or “factory gate”) inflation has shown a 1.2% jump on the month – far more than the modest 0.6% gain that was expected. Unlike the UK, wage inflation is on the up – driven by union demands within the auto-manufacturing sector. This brings the possibility of an interest rate hike in the euro zone into play and as such, risk appetite for investors has already improved. Call in now for a live exchange rate.
In the USA, the US dollar held near 2 week lows against the Swiss franc yesterday as the Swiss currency saw demand related to the situation in the Middle East. Anti-government protestors from Bahrain to Iran hoped to emulate their counterparts in Tunisia and Egypt and as such, as is normal in times of geopolitical tension, the Swiss franc sees ‘safe haven’ demand. Fed Chairman Ben Bernanke speaks today, so call in now for a live exchange rate.
Elsewhere, the G20 summit of finance ministers and central banks kicks off in Paris today with the focus on global imbalances. As a result, discussions are likely to turn to currency – especially China’s fixed exchange rate that is a major cause of current imbalance. Call in now for a live exchange rate.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, reminding us that inflation is not just an issue faced by the UK, German producer price (or “factory gate”) inflation has shown a 1.2% jump on the month – far more than the modest 0.6% gain that was expected. Unlike the UK, wage inflation is on the up – driven by union demands within the auto-manufacturing sector. This brings the possibility of an interest rate hike in the euro zone into play and as such, risk appetite for investors has already improved. Call in now for a live exchange rate.
In the USA, the US dollar held near 2 week lows against the Swiss franc yesterday as the Swiss currency saw demand related to the situation in the Middle East. Anti-government protestors from Bahrain to Iran hoped to emulate their counterparts in Tunisia and Egypt and as such, as is normal in times of geopolitical tension, the Swiss franc sees ‘safe haven’ demand. Fed Chairman Ben Bernanke speaks today, so call in now for a live exchange rate.
Elsewhere, the G20 summit of finance ministers and central banks kicks off in Paris today with the focus on global imbalances. As a result, discussions are likely to turn to currency – especially China’s fixed exchange rate that is a major cause of current imbalance. Call in now for a live exchange rate.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Thursday, 17 February 2011
Sterling strengthened against both the US dollar and euro yesterday following another jump in consumer price inflation in the UK. The figures showed that inflation hit 4% - up from 3.7% in December – giving rise to more and more speculation over interest rate hikes over the coming months. Financial markets had been pricing in an interest rate rise towards the second half of the year, but many feel there could be a hike as early as May. This saw sterling hit a high of $1.6169/£1 and €1.1963/£1 against the US dollar and euro on heavy buying. The Bank of England releases the latest Quarterly Inflation Report tomorrow which could see upward amendments to inflation expectations. If this happens we are likely to see sterling strengthen even further and break over €1.20/£1 and $1.63/£1, so call in now for a live exchange rate.
In the euro zone, the single currency slipped yesterday to the lowest level against sterling in 4 weeks as rate hike expectations boosted sterling and European data disappointed. GDP figures for the region showed that the economy grew by 0.3% against an expectation of 0.4% which didn’t help. In addition, German economic sentiment undershot expectations – highlighting the fragility of the region. Tomorrow is a relatively quiet day for European data but could see debt crisis related volatility, so call in now for a live price.
In the USA, the US dollar underperformed against the euro for the first time in four days yesterday as risk appetite saw the single currency benefit, but many analysts still expect the euro to suffer. Retail sales data for the US disappointed, showing growth of 0.3% against an expectation of 0.6%. This saw the US dollar fall marginally, but it held above an 8 week high against the Japanese yen as US government bond rates make US dollar holdings more attractive against Japanese holdings.
Elsewhere, the Australian dollar fell overnight as Reserve Bank of Australia Governor Glenn Stevens stated that interest rates were above average and that the central bank would not be raising rates for some time.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the single currency slipped yesterday to the lowest level against sterling in 4 weeks as rate hike expectations boosted sterling and European data disappointed. GDP figures for the region showed that the economy grew by 0.3% against an expectation of 0.4% which didn’t help. In addition, German economic sentiment undershot expectations – highlighting the fragility of the region. Tomorrow is a relatively quiet day for European data but could see debt crisis related volatility, so call in now for a live price.
In the USA, the US dollar underperformed against the euro for the first time in four days yesterday as risk appetite saw the single currency benefit, but many analysts still expect the euro to suffer. Retail sales data for the US disappointed, showing growth of 0.3% against an expectation of 0.6%. This saw the US dollar fall marginally, but it held above an 8 week high against the Japanese yen as US government bond rates make US dollar holdings more attractive against Japanese holdings.
Elsewhere, the Australian dollar fell overnight as Reserve Bank of Australia Governor Glenn Stevens stated that interest rates were above average and that the central bank would not be raising rates for some time.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Sterling strengthened against both the US dollar and euro yesterday following another jump in consumer price inflation in the UK. The figures showed that inflation hit 4% - up from 3.7% in December – giving rise to more and more speculation over interest rate hikes over the coming months. Financial markets had been pricing in an interest rate rise towards the second half of the year, but many feel there could be a hike as early as May. This saw sterling hit a high of $1.6169/£1 and €1.1963/£1 against the US dollar and euro on heavy buying. The Bank of England releases the latest Quarterly Inflation Report tomorrow which could see upward amendments to inflation expectations. If this happens we are likely to see sterling strengthen even further and break over €1.20/£1 and $1.63/£1, so call in now for a live exchange rate.
In the euro zone, the single currency slipped yesterday to the lowest level against sterling in 4 weeks as rate hike expectations boosted sterling and European data disappointed. GDP figures for the region showed that the economy grew by 0.3% against an expectation of 0.4% which didn’t help. In addition, German economic sentiment undershot expectations – highlighting the fragility of the region. Tomorrow is a relatively quiet day for European data but could see debt crisis related volatility, so call in now for a live price.
In the USA, the US dollar underperformed against the euro for the first time in four days yesterday as risk appetite saw the single currency benefit, but many analysts still expect the euro to suffer. Retail sales data for the US disappointed, showing growth of 0.3% against an expectation of 0.6%. This saw the US dollar fall marginally, but it held above an 8 week high against the Japanese yen as US government bond rates make US dollar holdings more attractive against Japanese holdings.
Elsewhere, the Australian dollar fell overnight as Reserve Bank of Australia Governor Glenn Stevens stated that interest rates were above average and that the central bank would not be raising rates for some time.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the single currency slipped yesterday to the lowest level against sterling in 4 weeks as rate hike expectations boosted sterling and European data disappointed. GDP figures for the region showed that the economy grew by 0.3% against an expectation of 0.4% which didn’t help. In addition, German economic sentiment undershot expectations – highlighting the fragility of the region. Tomorrow is a relatively quiet day for European data but could see debt crisis related volatility, so call in now for a live price.
In the USA, the US dollar underperformed against the euro for the first time in four days yesterday as risk appetite saw the single currency benefit, but many analysts still expect the euro to suffer. Retail sales data for the US disappointed, showing growth of 0.3% against an expectation of 0.6%. This saw the US dollar fall marginally, but it held above an 8 week high against the Japanese yen as US government bond rates make US dollar holdings more attractive against Japanese holdings.
Elsewhere, the Australian dollar fell overnight as Reserve Bank of Australia Governor Glenn Stevens stated that interest rates were above average and that the central bank would not be raising rates for some time.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Wednesday, 16 February 2011
Sterling strengthened against both the US dollar and euro yesterday following another jump in consumer price inflation in the UK. The figures showed that inflation hit 4% - up from 3.7% in December – giving rise to more and more speculation over interest rate hikes over the coming months. Financial markets had been pricing in an interest rate rise towards the second half of the year, but many feel there could be a hike as early as May. This saw sterling hit a high of $1.6169/£1 and €1.1963/£1 against the US dollar and euro on heavy buying. The Bank of England releases the latest Quarterly Inflation Report tomorrow which could see upward amendments to inflation expectations. If this happens we are likely to see sterling strengthen even further and break over €1.20/£1 and $1.63/£1, so call in now for a live exchange rate.
In the euro zone, the single currency slipped yesterday to the lowest level against sterling in 4 weeks as rate hike expectations boosted sterling and European data disappointed. GDP figures for the region showed that the economy grew by 0.3% against an expectation of 0.4% which didn’t help. In addition, German economic sentiment undershot expectations – highlighting the fragility of the region. Tomorrow is a relatively quiet day for European data but could see debt crisis related volatility, so call in now for a live price.
In the USA, the US dollar underperformed against the euro for the first time in four days yesterday as risk appetite saw the single currency benefit, but many analysts still expect the euro to suffer. Retail sales data for the US disappointed, showing growth of 0.3% against an expectation of 0.6%. This saw the US dollar fall marginally, but it held above an 8 week high against the Japanese yen as US government bond rates make US dollar holdings more attractive against Japanese holdings.
Elsewhere, the Australian dollar fell overnight as Reserve Bank of Australia Governor Glenn Stevens stated that interest rates were above average and that the central bank would not be raising rates for some time.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the single currency slipped yesterday to the lowest level against sterling in 4 weeks as rate hike expectations boosted sterling and European data disappointed. GDP figures for the region showed that the economy grew by 0.3% against an expectation of 0.4% which didn’t help. In addition, German economic sentiment undershot expectations – highlighting the fragility of the region. Tomorrow is a relatively quiet day for European data but could see debt crisis related volatility, so call in now for a live price.
In the USA, the US dollar underperformed against the euro for the first time in four days yesterday as risk appetite saw the single currency benefit, but many analysts still expect the euro to suffer. Retail sales data for the US disappointed, showing growth of 0.3% against an expectation of 0.6%. This saw the US dollar fall marginally, but it held above an 8 week high against the Japanese yen as US government bond rates make US dollar holdings more attractive against Japanese holdings.
Elsewhere, the Australian dollar fell overnight as Reserve Bank of Australia Governor Glenn Stevens stated that interest rates were above average and that the central bank would not be raising rates for some time.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Tuesday, 15 February 2011
Sterling was firm yesterday ahead of a big day of data releases in both the UK and euro zone. We have UK consumer inflation, euro zone GDP and US manufacturing data. In the UK, inflation is expected to break the 4% barrier – up from 3.7% in December. What is uncertain though, is the extent of the recent VAT increase. If this has already been passed on by retailers, then the impact on inflation will not have been so great. Inflation is still in line with the Bank of England’s expectations, with Mervyn King expecting it to peak at around 5% before dropping back off. Tomorrow’s Quarterly Inflation Report should give a clearer picture of the Bank’s expectations and intentions for monetary policy. Either way, it is set to be a turbulent few days so call in now for a live exchange rate.
In the euro zone, the euro hit a 3 week low against the US dollar on fresh fears over the region’s banking system. Markets are starting to realise that there is no ‘silver bullet’ that will fix the crisis and the increasing lack of a solution is taking its toll on the single currency, despite European Finance Ministers agreeing to a new fund totally €500bn from 2013. There is a wide array of data released today, with key economic sentiment data and the latest GDP figures that are expected to show 0.4% growth in the region for last Quarter. With both euro GDP and UK inflation being released within a short while of each other we could see some significant volatility.
In the USA, the focus will be on January retail sales figures and the Empire manufacturing survey – both of which are released later on today. Both are expected to show large improvements, and as such could see increased support for the US dollar. Call in now for a live exchange rate.
Elsewhere, Chinese inflation accelerated at a slower rate than expected overnight, coming in at 4.9% against an expectation of 5.4%. This helped higher yielding ‘commodity related’ currencies, as China will not necessarily need to step in to cool its economy down. As such, imports of commodities are likely to remain at similar levels – boosting demand for currencies such as the Australian dollar.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the euro hit a 3 week low against the US dollar on fresh fears over the region’s banking system. Markets are starting to realise that there is no ‘silver bullet’ that will fix the crisis and the increasing lack of a solution is taking its toll on the single currency, despite European Finance Ministers agreeing to a new fund totally €500bn from 2013. There is a wide array of data released today, with key economic sentiment data and the latest GDP figures that are expected to show 0.4% growth in the region for last Quarter. With both euro GDP and UK inflation being released within a short while of each other we could see some significant volatility.
In the USA, the focus will be on January retail sales figures and the Empire manufacturing survey – both of which are released later on today. Both are expected to show large improvements, and as such could see increased support for the US dollar. Call in now for a live exchange rate.
Elsewhere, Chinese inflation accelerated at a slower rate than expected overnight, coming in at 4.9% against an expectation of 5.4%. This helped higher yielding ‘commodity related’ currencies, as China will not necessarily need to step in to cool its economy down. As such, imports of commodities are likely to remain at similar levels – boosting demand for currencies such as the Australian dollar.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Monday, 14 February 2011
Sterling fell against a stronger US dollar on Friday after investors sold sterling on a lack of clarity about interest rates from the Bank of England. Sterling had been on a strong run on speculation that stubbornly high interest rates would see an interest rate hike in the early summer. However, with the Bank keeping interest rates on hold on Thursday (despite talk from key policy makers about raising interest rates to deal with inflation) investors were left confused and sold sterling on the lack of clarity. This week should see a little more clarity with the latest inflation figures and the Bank of England’s inflation report. Call in now to speak to one of the team for a live exchange rate.
In the euro zone, the euro slipped against the US dollar despite briefly posting gains on the news that Egyptian President Mubarak had resigned. This helped boost sentiment towards the riskier euro as stability returns to the country. However, the euro struggled to break over $1.35/€1 and as such is set to struggle this week. In terms of data, the key event is GDP data that is released on Tuesday. We could see some volatility, so call in to ensure you are protected.
In the USA, the US dollar strengthened against both the euro and sterling as a lack of clarity on UK interest rates and the euro zone debt crisis helped drive the US dollar higher. A recent run of strong US data also helped the dollar. In terms of data, there is a wide array of data including retail sales and producer price inflation.
Elsewhere, Vietnam devalued its currency for the 3rd time in a year in an attempt to address the economic turmoil that is gripping the country. The Dong has been devalued 6 times in 3 years. It could see some issues developing in South East Asia, so certainly something to keep an eye on.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the euro slipped against the US dollar despite briefly posting gains on the news that Egyptian President Mubarak had resigned. This helped boost sentiment towards the riskier euro as stability returns to the country. However, the euro struggled to break over $1.35/€1 and as such is set to struggle this week. In terms of data, the key event is GDP data that is released on Tuesday. We could see some volatility, so call in to ensure you are protected.
In the USA, the US dollar strengthened against both the euro and sterling as a lack of clarity on UK interest rates and the euro zone debt crisis helped drive the US dollar higher. A recent run of strong US data also helped the dollar. In terms of data, there is a wide array of data including retail sales and producer price inflation.
Elsewhere, Vietnam devalued its currency for the 3rd time in a year in an attempt to address the economic turmoil that is gripping the country. The Dong has been devalued 6 times in 3 years. It could see some issues developing in South East Asia, so certainly something to keep an eye on.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Friday, 11 February 2011
The Bank of England kept interest rates on hold yesterday at 0.5% and kept the Quantitative Easing programme on hold at £200bn. This initially saw sterling drop against the US dollar, but later recover on the expectation that the Bank would look to hike interest rates as early as May to deal with stubbornly high inflation. Higher interest rates mean that global investors will achieve a higher return on sterling based investments and as such, sees strength from the currency. The markets will keep a close eye on next week’s inflation report for any clue as to timings of a future rate hike. Call in now for a live exchange rate.
In the euro zone, yesterday saw some positive data in the form of French industrial production which beat expectations. However, the lack of concrete policy with regard to a long term debt reduction plan saw the euro slip against the US dollar by close to 1% on the day. Also, peripheral debt yields crept up as investors felt less averse to buying into the assets of ‘risky’ economies. It is a relatively quiet day for data, but ensure you are protected ahead of next week by speaking to one of the team.
In the USA, the US dollar had a strong day yesterday, benefiting from concerns over the euro zone debt crisis but also strengthening off the back of strong US data. Figures released yesterday showed that new claims for unemployment benefits dropped to a 2 ½ year low which helped underscore a belief that the US economy was on the mend. Call in now for a live exchange rate as there is still the chance of significant volatility.
Elsewhere, the Australian dollar slipped against most currencies yesterday as the Reserve Bank of Australia said that they would keep interest rates on hold for some time. The impact of the recent floods, and China’s efforts to cool runaway inflation and growth have left the outlook for Australia (and its exports) slightly cloudy. It may be a good time to look at buying Australian dollars to take advantage of sterling strength.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, yesterday saw some positive data in the form of French industrial production which beat expectations. However, the lack of concrete policy with regard to a long term debt reduction plan saw the euro slip against the US dollar by close to 1% on the day. Also, peripheral debt yields crept up as investors felt less averse to buying into the assets of ‘risky’ economies. It is a relatively quiet day for data, but ensure you are protected ahead of next week by speaking to one of the team.
In the USA, the US dollar had a strong day yesterday, benefiting from concerns over the euro zone debt crisis but also strengthening off the back of strong US data. Figures released yesterday showed that new claims for unemployment benefits dropped to a 2 ½ year low which helped underscore a belief that the US economy was on the mend. Call in now for a live exchange rate as there is still the chance of significant volatility.
Elsewhere, the Australian dollar slipped against most currencies yesterday as the Reserve Bank of Australia said that they would keep interest rates on hold for some time. The impact of the recent floods, and China’s efforts to cool runaway inflation and growth have left the outlook for Australia (and its exports) slightly cloudy. It may be a good time to look at buying Australian dollars to take advantage of sterling strength.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Thursday, 10 February 2011
Today is the day the Bank of England meets. The expectation is for more of the same; no interest rate increase and no increase in the quantitative easing programme. Uncertainty arises from the high inflation figures we are seeing and from the contraction in the economy in the fourth quarter of last year. These two sets of economic data having conflicting responses. Inflation can be combated by increasing interest rates whereas recession requires expansionary economic policies such as quantitative easing. So if the BoE does make a surprise decision we will be in for a volatile time for sterling. May well be worth giving us a call to avoid this if you want to minimise risk.
The European Central Bank needs to elect a new president soon. It was assumed that Axel Weber the head of the German Bundesbank would put himself forward. He has now ruled himself. The speculation as to why he did this is because he is against the ECB buying peripheral euro zone debt but political pressure is making this a more than likely outcome in the coming months. This view seemed to support the euro as the sorting out euro zone debt must be one of the ECB’s key goals over the coming months.
No real news out of the US to influence US$ movements. A greater influence seems to be news elsewhere such as in the Middle East and in China. Against sterling it is holding above the US$1.60/£1 level which would be positive in the medium term for sterling to strengthen further against the US$.
For the commodity backed currencies pressure has been building following the recent increase by China to its interest rates to combat inflation. Clearly inflation is a very significant problem in China and as well as increasing interest rates we could see them increase requirements such as banks reserves. In the short to medium term we will see continued demand for the commodities produced by Australia, by Canada and by others. But longer term I suspect the real key will be whether or not the Chinese manage a soft landing as opposed to a disastrous hard landing.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
The European Central Bank needs to elect a new president soon. It was assumed that Axel Weber the head of the German Bundesbank would put himself forward. He has now ruled himself. The speculation as to why he did this is because he is against the ECB buying peripheral euro zone debt but political pressure is making this a more than likely outcome in the coming months. This view seemed to support the euro as the sorting out euro zone debt must be one of the ECB’s key goals over the coming months.
No real news out of the US to influence US$ movements. A greater influence seems to be news elsewhere such as in the Middle East and in China. Against sterling it is holding above the US$1.60/£1 level which would be positive in the medium term for sterling to strengthen further against the US$.
For the commodity backed currencies pressure has been building following the recent increase by China to its interest rates to combat inflation. Clearly inflation is a very significant problem in China and as well as increasing interest rates we could see them increase requirements such as banks reserves. In the short to medium term we will see continued demand for the commodities produced by Australia, by Canada and by others. But longer term I suspect the real key will be whether or not the Chinese manage a soft landing as opposed to a disastrous hard landing.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Wednesday, 9 February 2011
Like yesterday, limited UK economic data led to a steady day for sterling against most other currencies. The UK government has increased the levy to be raised on the banks to £2.5 billion. This hasn’t gone down well with the banks. The market is waiting for the Bank of England meeting tomorrow and any shock announcements on interest rates. So volatility could increase in the run up to mid-day tomorrow. If concerned please give us a ring so that we can talk through the various scenarios.
In the Euro zone German industrial production for December came in below expectations. So it isn’t just the UK that caught a cold from December’s bad weather. But just like here the German economy continues to grow and the underlying strength of Germany’s industrial sector should never be underestimated.
Yields on US treasury bonds continue to rise. This is lending some support to the US$ in the short term although the response to the US$32 billion issuance of three year debt was disappointing. I suspect the market sees further increases in US debt yields.
China increased interest rates for the second time in six weeks. Inflation would seem to be key and something the Chinese authorities are keen to get on top of. One of the problems is that by keeping their currency artificially low they are beginning to see the cost of their imports grow significantly. Initially the Australian, Canadian and New Zealand dollars lose ground but this was soon reversed.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the Euro zone German industrial production for December came in below expectations. So it isn’t just the UK that caught a cold from December’s bad weather. But just like here the German economy continues to grow and the underlying strength of Germany’s industrial sector should never be underestimated.
Yields on US treasury bonds continue to rise. This is lending some support to the US$ in the short term although the response to the US$32 billion issuance of three year debt was disappointing. I suspect the market sees further increases in US debt yields.
China increased interest rates for the second time in six weeks. Inflation would seem to be key and something the Chinese authorities are keen to get on top of. One of the problems is that by keeping their currency artificially low they are beginning to see the cost of their imports grow significantly. Initially the Australian, Canadian and New Zealand dollars lose ground but this was soon reversed.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Tuesday, 8 February 2011
A quiet day for sterling yesterday with sterling holding onto gains against the euro and the US$. As mentioned yesterday there is a lack of substantive economic data this week and the market is waiting for the Bank of England meeting on Thursday. Talk of a rise in UK interest rates continues to be the fore but I think any increase at the BoE meeting is very unlikely.
The euro, a bit like sterling, had a quiet day. The economic data that could influence matters has been somewhat sparse and the European Central Bank held its interest rate setting meeting last week and was very firmly in the camp for holding euro zone interest rates at their current level for the time being. Against the US$ the euro has lost a bit of ground over the last week but still sits towards the top end of the three month range.
And needless to say the US$ has been fairly steady over the last 24 hours. What is beginning to benefit the US$ is rising yields on US treasury bonds which are increasing as the US economic performance improves. The yield on two year government bonds hit their highest level since June of last year.
And the same again for the Australian dollar which held steady. A benign start to the week. Given our experience over the last three years it is hard to imagine it staying this way for long and as such I would give us a call to avoid the more than likely surprises.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
The euro, a bit like sterling, had a quiet day. The economic data that could influence matters has been somewhat sparse and the European Central Bank held its interest rate setting meeting last week and was very firmly in the camp for holding euro zone interest rates at their current level for the time being. Against the US$ the euro has lost a bit of ground over the last week but still sits towards the top end of the three month range.
And needless to say the US$ has been fairly steady over the last 24 hours. What is beginning to benefit the US$ is rising yields on US treasury bonds which are increasing as the US economic performance improves. The yield on two year government bonds hit their highest level since June of last year.
And the same again for the Australian dollar which held steady. A benign start to the week. Given our experience over the last three years it is hard to imagine it staying this way for long and as such I would give us a call to avoid the more than likely surprises.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Monday, 7 February 2011
On the back of better than expected UK economic data last week the markets began to talk about the UK increasing interest rates sooner than later. Mervyn King, Governor of the Bank of England, has made it clear that he wants to avoid raising interest rates as he thinks that it will affect the UK economic recovery negatively. However, inflation is on the up and hitting levels that make it uncomfortable for the Bank of England monetary policy committee who may be forced to increase interest rates. This is unlikely to happen at this weeks meeting but given two members of the committee voted for an increase last time it cannot be assume to be a certainty. Normally an increase in interest rates would be supportive for sterling but uncertainty reigns so I would also advise caution.
In the Euro zone we have important economic data released. German industrial orders for December are expected to show a slight dip when compared to November but the annual growth rate is expected to be a highly impressive 20%. Elsewhere the growth is less impressive [France is expected to have grown by 6.1%] but overall it is expected to be positive for the euro zone. The euro zone debt crisis will continue to be at the fore front of the markets thoughts this week.
US non farm payroll data released on Friday were slightly disappointing. This didn’t seem to affect the US$ unduly which had gained ground against the euro during the week. Economic data out of the US this week is limited and therefore events elsewhere such as in the Middle East are likely to influence the US$’s movement.
Elsewhere we have Japanese consumer confidence data released on Wednesday. An increase, the first in seven months, is expected.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the Euro zone we have important economic data released. German industrial orders for December are expected to show a slight dip when compared to November but the annual growth rate is expected to be a highly impressive 20%. Elsewhere the growth is less impressive [France is expected to have grown by 6.1%] but overall it is expected to be positive for the euro zone. The euro zone debt crisis will continue to be at the fore front of the markets thoughts this week.
US non farm payroll data released on Friday were slightly disappointing. This didn’t seem to affect the US$ unduly which had gained ground against the euro during the week. Economic data out of the US this week is limited and therefore events elsewhere such as in the Middle East are likely to influence the US$’s movement.
Elsewhere we have Japanese consumer confidence data released on Wednesday. An increase, the first in seven months, is expected.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Friday, 4 February 2011
Sterling continued its run against the US dollar yesterday, hitting a high of $1.6276/£1 after services PMI data came in stronger than expected indicating strong services sector activity. With this week’s better than expected manufacturing, construction and now services figures; the case for an interest rate hike has returned. Comments from Bank of England policy makers this week have also given rise to an expectation of further hikes – especially if commodity prices remain high. Sterling is likely to remain well supported against the US dollar – especially ahead of next week’s Bank of England meeting. The outlook against the euro is a bit more mixed, with flow related to the debt crisis and risk appetite keeping sterling on its toes. Out today, we have already seen better than expected house prices so call in now for a live exchange rate.
In the euro zone, yesterday saw the European Central Bank’s interest rate decision. The bank kept interest rates on hold and disappointed many investors who were expecting a more upbeat press conference from Bank President Jean-Claude Trichet. There had been warnings in the last few weeks over inflation in the region and as a result, many had been expecting talk of interest rate hikes. The euro fell by 2 cents against the US dollar on the day as traders sold the euro in disappointment. Out today, there is some Italian inflation data so call in now for a live exchange rate.
In the USA, the US dollar is set for a big day with Non-Farm payroll figures released this afternoon. Economists are expecting 140,000 new jobs to be added to the economy in January and the figure can cause a lot of volatility so ensure you speak to one of the traders to avoid losing out if there is significant movement.
Elsewhere, the Reserve Bank of Australia raised its 2011 growth outlook and inflation forecasts which saw the Australian dollar strengthen. Importantly this is despite the flooding in Queensland and a potential slowdown in China, so the markets reacted positively.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, yesterday saw the European Central Bank’s interest rate decision. The bank kept interest rates on hold and disappointed many investors who were expecting a more upbeat press conference from Bank President Jean-Claude Trichet. There had been warnings in the last few weeks over inflation in the region and as a result, many had been expecting talk of interest rate hikes. The euro fell by 2 cents against the US dollar on the day as traders sold the euro in disappointment. Out today, there is some Italian inflation data so call in now for a live exchange rate.
In the USA, the US dollar is set for a big day with Non-Farm payroll figures released this afternoon. Economists are expecting 140,000 new jobs to be added to the economy in January and the figure can cause a lot of volatility so ensure you speak to one of the traders to avoid losing out if there is significant movement.
Elsewhere, the Reserve Bank of Australia raised its 2011 growth outlook and inflation forecasts which saw the Australian dollar strengthen. Importantly this is despite the flooding in Queensland and a potential slowdown in China, so the markets reacted positively.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Thursday, 3 February 2011
Sterling hit a 3 month high against the US dollar yesterday, touching $1.6232/£1 as strong data and positive comments from policymakers gave rise to expectations of interest rate hikes sooner than expected. Construction figures showed that activity returned to growth last month, with the numbers easily beating expectations. Andrew Sentance (who has been advocating interest rate hikes for some time) warned against delaying a rate rise and deputy Governor of the Bank of England, Charles Bean warned that a rate rise would be inevitable if commodity prices continued to rise. Markets are now pricing in a potential rate rise in May – with some expecting a hike next week. A key level is the November high of $1.63/£1 – if sterling breaks through this, it opens up the road to further gains. Out today there is important service sector figures – call in now for a live exchange rate.
In the euro zone, the euro slipped against both sterling and the US dollar on uncertainty surrounding a euro zone rescue plan and profit taking by investors following the euro’s recent gains. There was talk that the euro zone was considering allowing its rescue fund purchase debt from distressed countries, but a German official stated that Berlin was not happy allowing this to happen. This uncertainty, combined with the situation in Egypt and the Middle East saw traders closing out profitable positions after the euro hit a 2 ½ month high against the US dollar. Out today there is the ECB’s interest rate decision and press conference – ensure you are protected from any ensuing volatility by speaking to a trader sooner rather than later.
In the USA, yesterday’s ADP non-farm payroll figures came in better than expected, showing an increase of 187,000 jobs against an expectation of 147,000. The US dollar also gained against the euro following the uncertainty over the European rescue plan, but also as the currency regained its ‘safe haven’ status in the face of growing uncertainty in Egypt. There is some important PMI data released in the USA, so call in now for a live exchange rate.
Elsewhere, the Swiss franc has also seen some risk related buying. Investors traditionally look to safe currencies in the event of market risk, such as what we are seeing in Egypt. In addition, overnight into tomorrow we have the Reserve Bank of Australia’s interest rate policy statement which could be quite interesting. Call in now for a live exchange rate.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the euro slipped against both sterling and the US dollar on uncertainty surrounding a euro zone rescue plan and profit taking by investors following the euro’s recent gains. There was talk that the euro zone was considering allowing its rescue fund purchase debt from distressed countries, but a German official stated that Berlin was not happy allowing this to happen. This uncertainty, combined with the situation in Egypt and the Middle East saw traders closing out profitable positions after the euro hit a 2 ½ month high against the US dollar. Out today there is the ECB’s interest rate decision and press conference – ensure you are protected from any ensuing volatility by speaking to a trader sooner rather than later.
In the USA, yesterday’s ADP non-farm payroll figures came in better than expected, showing an increase of 187,000 jobs against an expectation of 147,000. The US dollar also gained against the euro following the uncertainty over the European rescue plan, but also as the currency regained its ‘safe haven’ status in the face of growing uncertainty in Egypt. There is some important PMI data released in the USA, so call in now for a live exchange rate.
Elsewhere, the Swiss franc has also seen some risk related buying. Investors traditionally look to safe currencies in the event of market risk, such as what we are seeing in Egypt. In addition, overnight into tomorrow we have the Reserve Bank of Australia’s interest rate policy statement which could be quite interesting. Call in now for a live exchange rate.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Wednesday, 2 February 2011
Sterling shrugged off last week’s poor GDP and concerns over the situation in Egypt to hit an 11 week high against the US dollar of $1.6143/£1. Manufacturing purchasing figures surged to the highest level since the survey began in 1992 and led to markets pricing in a 70% chance of an interest rate hike as early as May. There is increasing belief in the idea that the cost of long term inflation would outweigh the benefit of leaving rates on hold. We are starting to see support for a 0.25% rate hike to curb inflation and at the same time maintain growth. However, mortgage approval figures were poor and sterling is still likely to remain very sensitive to negative data, so there is still a large risk that it could drop back down – take advantage while you can.
In the euro zone, the euro continued to strengthen against the US dollar spurred on by strong manufacturing data around the world and the subsequent boost that this gave to appetite for riskier investments. In addition, banks in the euro zone borrowed over €200bn from the European Central Bank fund this week – a move that will keep high liquidity in the region’s banks and has kept investors happy. Released today there is producer price inflation for the region, which could be fairly interesting so call in now for a live exchange rate.
In the USA, it is a relatively quiet day for data against a busy week. Today sees the ADP non-farm employment change – generally seen as the less important of the 2 figures released this week, the other being on Friday. However, last month’s figure showed a 200,000 surge in employment that set up the markets for the Friday figure which ultimately was very disappointing. Call in now for a live exchange rate as we are seeing US dollar weakness driven by interest rate expectations.
Elsewhere, the Japanese yen fell in Asian trade overnight as risk appetite around the world saw investors selling the traditionally ‘safe haven’ currency. Call in now for a live exchange rate.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, the euro continued to strengthen against the US dollar spurred on by strong manufacturing data around the world and the subsequent boost that this gave to appetite for riskier investments. In addition, banks in the euro zone borrowed over €200bn from the European Central Bank fund this week – a move that will keep high liquidity in the region’s banks and has kept investors happy. Released today there is producer price inflation for the region, which could be fairly interesting so call in now for a live exchange rate.
In the USA, it is a relatively quiet day for data against a busy week. Today sees the ADP non-farm employment change – generally seen as the less important of the 2 figures released this week, the other being on Friday. However, last month’s figure showed a 200,000 surge in employment that set up the markets for the Friday figure which ultimately was very disappointing. Call in now for a live exchange rate as we are seeing US dollar weakness driven by interest rate expectations.
Elsewhere, the Japanese yen fell in Asian trade overnight as risk appetite around the world saw investors selling the traditionally ‘safe haven’ currency. Call in now for a live exchange rate.
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
Tuesday, 1 February 2011
Sterling rose against the US dollar on Monday, boosted by a strong day for the euro as data showed increasing inflation in the region and increased expectations of an interest rate hike in the euro zone. Sterling also saw a boost from a newspaper article in which Martin Weale (the latest Bank of England policy maker to call for a 0.25% interest rate hike) stated that a small interest rate hike soon would cost less than sustained inflation in the long run. The prospect of tightening monetary policy in the euro zone and UK contrasts sharply with the USA, where the Federal Reserve is likely to keep monetary policy loose for some time to come. Out today, there is important house price and manufacturing data so call in now for a live exchange rate.
In the euro zone, inflation came in at 2.4% for the year – up from 2.2% the last month. This follows on from ECB president Jean-Claude Trichet’s comments a few weeks ago warning over higher inflation. Higher interest rates in the region will make euro based investments a more attractive option and as such, saw the euro strengthen against the US dollar. It seemed that both the euro and sterling shrugged off any concerns over the situation in Egypt, which has the potential to cause shocks through the currency markets so ensure you don’t lose out if it does by speaking to a trader today.
In the USA, the US dollar slipped to near a 2 month low against the euro as the USA’s monetary policy outlook contrasted sharply with the euro zone’s inflation and potential interest rate hikes. Markets are now keeping an eye on the key level of $1.3760/ €1 – if the euro goes through this, it could open the door to $1.39/€1 or beyond. Oil broke through $100 per barrel yesterday for the first time since the depths of the credit crisis on concerns over supply and Egypt, but bizarrely we did not see much risk related buying of the US dollar. Out today, there is manufacturing PMI data so call in now for a live exchange rate.
Elsewhere, Canadian GDP came in better than expected posting 0.4% gains against an expectation of 0.2% helped by higher demand from China for commodities in recent months. Normally at this time of year, writers of currency updates can look to the football transfer markets for examples of why planning your currency exchange effectively (and not leaving it until the last minute) can protect you from fluctuations in exchange rates. However, yesterday’s big signings seemed to be a strictly domestic affair… Feel free to call in for a live exchange rate or bemoan FernandoTorres’ move to Chelsea!
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
In the euro zone, inflation came in at 2.4% for the year – up from 2.2% the last month. This follows on from ECB president Jean-Claude Trichet’s comments a few weeks ago warning over higher inflation. Higher interest rates in the region will make euro based investments a more attractive option and as such, saw the euro strengthen against the US dollar. It seemed that both the euro and sterling shrugged off any concerns over the situation in Egypt, which has the potential to cause shocks through the currency markets so ensure you don’t lose out if it does by speaking to a trader today.
In the USA, the US dollar slipped to near a 2 month low against the euro as the USA’s monetary policy outlook contrasted sharply with the euro zone’s inflation and potential interest rate hikes. Markets are now keeping an eye on the key level of $1.3760/ €1 – if the euro goes through this, it could open the door to $1.39/€1 or beyond. Oil broke through $100 per barrel yesterday for the first time since the depths of the credit crisis on concerns over supply and Egypt, but bizarrely we did not see much risk related buying of the US dollar. Out today, there is manufacturing PMI data so call in now for a live exchange rate.
Elsewhere, Canadian GDP came in better than expected posting 0.4% gains against an expectation of 0.2% helped by higher demand from China for commodities in recent months. Normally at this time of year, writers of currency updates can look to the football transfer markets for examples of why planning your currency exchange effectively (and not leaving it until the last minute) can protect you from fluctuations in exchange rates. However, yesterday’s big signings seemed to be a strictly domestic affair… Feel free to call in for a live exchange rate or bemoan FernandoTorres’ move to Chelsea!
Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/
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