Smart Daily Currency Note | No "back to work blues" for the currency markets

Sterling

It was a mixed day for sterling yesterday. David Cameron admitted in the morning that economic times were tough, and that the UK needed low interest rates to continue, and the chatter of a potential triple dip recession returned to lips of traders across the market. As such, it was not all that surprising that sterling slipped off in value. While it pared off the losses against the dollar pushing up towards 1.61 in the late afternoon, it dropped back down below the 1.23 mark against the euro. Today is a quiet day for data, but expect talk of the "triple dip" to continue after last week's week manufacturing and services data. Get in touch now for the latest news.

Euro

The euro had a mixed day yesterday with little data was released within the Euro zone except investor confidence figures came our better than expected. Some economists are now starting to predict that the European Central Bank (ECB) may cut interest rates by 0.25% at this week's central bank meeting, although the general consensus is that the ECB will still hold rates at 0.75%. Out today, the most significant release  will include euro-area wide retail sales and unemployment data, German factory order and trade balance data from Germany and France.  These are all important indicators of the economic climate so call in now to hear how the data released has impacted the exchange rate.

US dollar

The US dollar struggled yesterday, slipping away from a near three week high against the euro and struggling across the board as the US markets focus on the fourth quarter earnings season which unofficially begins late tonight. With very little data out today, expect markets to continue to remain fairly range bound as traders wait for unemployment and trade balance data at the end of the week. Volatility elsewhere is likely to be the main driver in moving the US dollar, as traders wait on further monetary easing in Japan which could benefit the dollar. Get in touch now for the latest news and rates.

Worldwide

Elsewhere, one of the biggest movers of the day was the South African rand, losing ground versus the majority of its trading peers. Returning to work after their summer holiday, most South African import businesses took the opportunity to purchase foreign currency following a December rally; with the highest demand being for the US dollar. It was a better day for the Japanese yen, rebounding versus its major partners, and strengthening from a near 29-month low versus the US dollar on emerging speculation that the currency had been somewhat oversold. News that the Bank of Japan is likely to increase spending to improve economic performance also buoyed other currencies, with the Australian Dollar in particular benefitting on the back of this news. The main data release yesterday saw slightly better than forecast PMI data from Canada, although the effect was fairly muted - with only minor gains versus its US counterpart. Overnight saw the release of the latest Australian trade balance, so call in now for the latest update and to get a live price.