Cypriot banks reopen | Smart Daily Currency Note

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Sterling

Sterling had a good week against the euro, rising to a two month high of 1.1850 yesterday due to the shocking developments that have occurred in Cyprus over the past week and a half. Sterling did lose ground against the US dollar and struggled against a number of its other peers as several pieces of weak data were released and due to some analysts feeling that sterling had been “overbought” recently. The CBI's sales report described flat trading volumes throughout March,  the number of new mortgages approved increased by less than expected and yesterday the current account figures showed the trade gap had widened yet again. Today sees the nationwide house price index release with a forecast of another rise of 0.2% and a report on consumer confidence. These will be closely watched this month due to the current situation in the country. There is bank holiday in UK tomorrow and on Monday which brings decreased liquidity to the markets and in turn can lead to over-exaggerated moves in the market. Get in touch today for an up to the second exchange rates and the latest news.

Euro

The short week this week has been dominated by a small island in the Mediterranean. Huge uncertainty has weighed on the euro, dragging it to well below 1.28 against the US dollar, and over 1.18 against the pound. Political gridlock in Italy compounded market nervousness leading to disappointing results at the Italian Bond Auction. The paradox for the euro as banks reopen in Cyprus today, is that a euro in a German account is worth more than one in a Cypriot one, while a euro in cash on Cyprus is worth more than anywhere else. Today we have German retail sales and unemployment data which traders will keep a close eye on due to Germanys status as the economic powerhouse of Europe. While capital flow controls will be implemented to stop all money being pulled out of Cyprus at once, over the long weekend we should see things balance out again. Get in touch now for the latest developments, and up to the second prices.

US dollar

The US dollar had a fairly strong start to the week as risk aversion dominated trading patterns due to the continuing European uncertainty meaning FX investors were buying safe-haven currencies. The US dollar continued to strengthen in spite of new home sales and consumer confidence coming in worse than forecast, whilst the monthly figures for durable goods orders showed a better than expected increase. Yesterday saw the release of pending home sales statistics which came in slightly under forecast and are seen a good indicator of the how the housing market is going to behave over the next few months. Today we see the release of the weekly unemployment claims data and the final GDP reading for the fourth quarter of 2012 which is expected to show modest growth of 0.5%. On Friday the US will release revised consumer sentiment figures and on Monday Manufacturing Purchasing Managers' Index (PMI) data will give a clear indication of the state of the manufacturing sector in the US. Get in touch for the latest rates.

Worldwide

Elsewhere, the Japanese yen has continued to strengthen this week as investors seek safer havens for their money, although it showed signs of levelling out yesterday in response to the Governor of the Bank of Japan's announcement that he aims to achieve 2% inflation targets in 2 years. Traders look set to continue selling yen as Japan presses ahead with its ultra-loose monetary policy. Additionally, various data, including figures concerning manufacturing, is set to be released between now and Monday, which may also have a bearing on performance. The approval of a $100 billion fund by leaders from the BRICS nations may have significant long-term implications for the currencies of those nations. This is meant to serve a similar purpose to that of the IMF  and should it be successful could provide effective liquidity support and boost confidence in the BRICS currencies. Today sees the release of monthly Canadian GDP data, which may give the currency a boost if we see some growth. This evening we will have inflation data out of Japan and on Monday Chinese manufacturing PMI will be the headline release. Call in now for live rates and up to the minute information. 

A quieter day for currencies | Smart Daily Currency Note

Sterling

Sterling eased from close to a six week high against the euro and dropped against the US dollar yesterday, as a timely reminder to investors about Britain's cloudy economic forecast came in the form of the CBI's sales report. Indeed, the country's flat retail sector had a noticeable effect with sterling dipping to 1.5135 after the report which described flat trading volumes throughout March. Furthermore, some analysts feel that sterling has been somewhat “overbought” recently following the scraps of positive economic data in Britain and the problems in the Eurozone; as a result, the theory is the underlying problems in the UK are now resurfacing and in turn could push sterling lower. The disparity in economic prospects compared to America means sterling will struggle against the US dollar as the recovery in the US starts to solidify. The Federal Reserve could stop purchases of further assets later this year, but in contrast the Bank of England is likely to instigate another wave of quantitative easing given the government has meagre fiscal leverage with its austerity commitments. Out today we have the final GDP reading for the fourth quarter of 2012 which is expected to show a contraction of 0.3% and current account figures which are forecast to show the trade gap has widened yet again. Call in now for the latest update from your trader. 

Euro

It was a much better day for the euro yesterday, but only to the point that it didn't lose any further ground against its major trading partners after reaching a four month low against the US dollar. This increased stability came as the Cypriot Finance Minister played down talk of an unprecedented exit from the Eurozone. Those banks which have survived are expected to reopen tomorrow, but be subject to capital movement limitations - in theory temporarily - to prevent all capital flooding out of the country. With little data released today, it will continue to be Cyprus dominating the landscape, with markets still weighing up the precedent value of the bailout. The Italian bond auction will serve as a very good barometer of opinion, expect the euro to remain weak as long as it appears as unstable a prospect as it does at the moment. Get in touch today for up to the second pricing, and the latest news. 

US dollar

Despite a variety of data coming out of the world's largest economy yesterday, the US dollar remained relatively stable. Very little movement was seen against the euro whilst the US dollar strengthened slightly against sterling. Data concerning new home sales and consumer confidence came in worse than forecast, whilst the monthly figures for durable goods orders showed a better than expected increase. The lack of significant movement may in part be due to traders being preoccupied by events in the Eurozone. Monthly data regarding pending home sales in the US is set to be released today and the markets may also be affected by the release of crude oil inventories and the two speeches by bank officials who may give a clearer indication of the Federal Reserve’s intended monetary policy going forwards. Call in now for live rates and up to the minute information. 

Worldwide

Elsewhere, the Japanese yen suffered yesterday following comments from the incoming Bank of Japan Governor who signalled his intentions to an ultra-loose monetary policy which will devalue the yen. The Australian dollar performed well yesterday - reaching a two month high against the US dollar - as speculation on further interest rates cuts waned as the Governor of the Reserve Bank made no hints towards further easing. Today Japan's retail sales are expected to rise to 0.9% in February from a fall of  1.1% in January. We will also see business confidence data from New Zealand whilst in the evening we will have inflation data released from Canada with a forecasted rise of 0.3%. Get in touch now for the latest news and rates on your currency. 

Cyprus unsettles the euro | Smart Daily Currency Note

Sterling

Yesterday was a mixed day for sterling with gains on some fronts and losses on others. It made further gains against the euro, reaching a six week high of 1.1820 following comments from the head of the Eurogroup of Eurozone finance ministers who suggested that many countries needing a bail out would follow the Cyprus model of a tax on bank deposits.  On the other front, sterling lost ground against the US dollar as data released showed that the number of new mortgages approved for home purchase in UK fell below the market estimate. Today the Chancellor will testify on the 2013 Budget to the Treasury Select Committee, but his comments are not expected to cause any big disruption to the markets. We also have realised sales figures which are predicted to rebound this month after the indicator came out worse than expected in February. Call in today for the latest updates on sterling.

Euro

Cypriot lawmakers reached an agreement with the Eurozone finance ministers very early Monday morning to approve the bailout. In return for the ten billion euro loan from the IMF, the second biggest bank in Cyprus will be wound up, and deposits of over 100,000 euros will be subject to a compulsory one off levy. The Dutch Finance minister said yesterday that the model should be applied to the rest of the Eurozone leading to speculation that raiding banks would be a condition for any further bailouts - to such an extent that two major Italian banks halted trading of their shares after prices plummeted by over 5%. The uncertainty drove the euro down to a four month low against the US dollar, losing two cents very quickly as it headed towards 1.284. It also hit a six week low against sterling and has settled around 1.18 overnight. The euro has certainly been undermined by recent events but the weakness could be fleeting as volatility reduces. Call in now for the latest news and developments, and for an up to the second rate on the euro.

US dollar

The US dollar had a strong day yesterday, up against all of its major peers except the Japanese Yen. This strength was as a result of a risk averse market with investors looking to purchase safe-haven currencies, as market uncertainty continues to dominate the markets in response to the situation in Europe.  Today is an interesting day for the US Dollar, as three important pieces of data are released. Firstly, the monthly Core Durable Goods statistics, which is a leading indicator for manufacturing, is forecast to show a drop in growth of just 0.7%. We also have consumer confidence figures and statistics on the number of new home sold in the last month. These are all key indicators for the state of the economy in the US and will be watched closely by investors. Stay tuned for the latest rates.

Worldwide

Elsewhere, the Japanese yen had a steady start to the day before strengthening in the afternoon and making considerable gains against its major peers. The positive performance may have been aided by the resurgence of risk aversion as faith in the Eurozone is yet to be restored. On-going performance is likely to be affected by the Governor of the Bank of Japan's speech today as he sets out his plans for the central banks ultra-loose monetary policy. The Australian dollar made some gains early in the day, but these were largely cancelled out by a poorer performance in the afternoon. The Governor of the Reserve Bank of Australia will be speaking in Sydney today and traders will analyse this in order to predict the central bank’s monetary policy decisions going forwards. Additionally, the biannual financial stability review released later on in the day may display further hints surrounding future monetary policy. Call in now for live rates and up to date information.

Cyprus back from the brink | Smart Daily Currency Note

Sterling

Sterling had a mixed day on Friday, falling from its five week high against the euro, as an injection of confidence into the 17 nation currency came as a result of Cyprus moving closer to reaching a bailout agreement. It is a fairly quiet week on the data front in the UK with the main release being the quarterly release of current account statistics, showing the difference in value between imported and exported goods, which will undoubtedly have an impact on the markets. Other data released this week includes a raft of housing related data including the monthly change in the number of new mortgages approved for home purchase and the change in the selling price of homes with mortgages. We also have the Chancellor speaking, the Bank of England's quarterly report on the current level of credit in the UK and the final GDP reading for the fourth quarter of 2012 which is expected to show a contraction of 0.3%.  This, combined with the developments in Cyprus, is likely to make it an interesting week for sterling. Get in touch for the latest rates 

Euro

Friday saw some mild improvements for the euro, ending an extremely bad week for the 17 nation currency. Although German data on the Business Climate in the country came out with a disappointing set of figures, we saw the euro rise against all of its major peers for the first time in a week based on optimism of resolving the situation in Cyprus. Over the weekend, a deal principal appears to have been struck between Cyprus and the Troika helping the euro back over the 1.30 level against the US dollar. This deal will now go to Brussels, as it needs to be signed off by the Eurogroup finance ministers. This week see's a lot of data released including consumer climate figures, the monthly retail sales data and the change in unemployment in Germany. There has been a raft of poor data out of Europe recently so analysts will pay close attention to see if this weeks figures follow suit. We also have an Italian 10-year bond auction which will be closely scrutinised as Italy has still not formed a Government following the recent elections. The outrage in Cyprus and speculations on contagion effects and a potential bank run continue to be a threat for the Euro Area as a whole, so call in today for the latest update from your trader. 

US dollar

The US dollar ended last week fairly poorly as it lost ground against the majority of its major peers on Friday. Most notably significant ground was lost against the euro and the rate managed to rise back above 1.30 for a brief period. There was no significant data released affecting the currency directly so its performance was largely defined by developments in the UK and the on-going situation in Cyprus and the waning of risk aversion, which had previously swept the market. However, this week sees a number of events concerning the world's largest economy, which are likely to impact on the US dollar's performance. The Chairman of the Federal Reserve will be coming to London early in the week to take part in a panel event and his words are likely to affect trading. Additionally, a variety of other data is set to be released throughout the week including figures concerning home sales, consumer confidence and unemployment claims. Call in now for live rates and up to date information. 

Worldwide

Elsewhere, the biggest loser on Friday was the South African rand, continuing its slump to hit seven week lows against sterling suffering in the risk averse market brought on by the situation in Cyprus. The Australian dollar traded close to recent highs as speculation dropped that the Reserve Bank would cut interest rates, the truth could be spelt out when the Governor speaks on Tuesday. After two strong weeks for the Japanese yen on the back of signs that the weak currency plan is working, it will be interesting to see whether traders let the Bank of Japan drive the currency further down to the targeted level of 100 against the dollar. Get in touch now for the latest news and rates on your currency.

Sterling benefits from Cyprus uncertainty | Smart Daily Currency Note

Sterling

Sterling has had a good week and for the second week in a row it is at a higher level against the euro and the US dollar than it was at the start. It made gains against the majority of its major counterparts including reaching  a five week high of 1.1775 against the euro and a one month high of 1.52 against the US dollar. On a very busy week for the UK, we saw the latest Monetary Policy Committee (MPC) meeting minutes reveal that there was no change in the number of members voting for an increase in quantitative easing which helped sterling as there were murmurs that another member may have voted in favour. George Osborne’s relatively neutral budget did include some reforms which pleased the market such as the 1% cut to corporation tax, as well as national insurance relief for small businesses; however, this was marred by the Office for Budgetary Responsibility released some daunting figures showing national debt continuing to rise until 2018 and will reach 85% of GDP. The budget also included a new remit for the Bank of England saying that the 2% inflation target is "necessary but not sufficient", and that Mark Carney's bank should be able to focus on growth as well as inflation, much as the American Federal Reserve does. Yesterday saw another lift for sterling as retails sales figures came out much better than forecast showing a sharp rise to 2.1% compared to the 0.6% forecast, and the first month of positive growth in the sector since October. Moreover, we also saw better than expected public finances figures which must have pleased the Chancellor! There is very little expected to be released from the UK today; but, with  the situation in Cyprus far from resolved, it is still likely to be an interesting day for sterling. Get in touch for the latest rates.

Euro

News and speculation surrounding the Cypriot bailout have had a significant negative impact on the euro this week. Despite a reasonable performance on Wednesday due to hopes that an agreement with the ECB might be reached, this week has seen the euro lose considerable ground against the majority of its major peers. It was traded at almost its lowest rate in four months against the US dollar as it hovered around the 1.29 level. The 17-nation currency was hampered further by worse than expected manufacturing and services data coming from France and Germany. Whilst Cyprus accounts for only half a per cent of the Eurozone's economic activity the uncertainty surrounding its future does not bode well for the single currency. The ECB have given Cyprus until Monday to raise the capital required for the bailout agreement, whilst there have also been rumours surrounding possible financial aid from Russia. Today sees the release of the usually influential Institute for Economic Research German survey, but equally any updates from Cyprus could also have a big impact on the strength of the euro. Call in now for live rates and up to date information. 

US dollar

The US dollar has performed well this week as risk related flow has caused investors to buy US dollars as a safe haven currency helping the US dollar reach a four month high against the euro. The Federal Bank voted to keep interest rates and quantitative easing on hold this week; but, left the stimulus tap wide open for further easing in spite of recent encouraging developments on the domestic economic front. The current asset purchase program will continue at the previous $85 billion monthly rate for now. Furthermore, we saw the Federal Open Market Committee lower its near-term outlook for GDP growth to 2.8% from 3.0%.Other data released included building permits figures, Philly manufacturing index and unemployment clams which all came out slightly better than forecast; but, existing home sales fell slightly short of market estimates. There is no significant data due to be released today, as a result, you can expect the US dollar to trade more on general market sentiment and you would imagine any dramatic price action would be as a result of developments in Cyprus. Call in now for an update on how the US dollar is trading.

Worldwide

Elsewhere, the Japanese yen has performed well this week due to people turning back to safe haven currencies and shrugged off data showing a trade deficit for the eighth month in a row. The continued trade deficit supports the Bank of Japan's current monetary policy, weakening the yen to help boost exports. The New Zealand dollar had a strong end to the weak after much better than expected GDP data was released showing growth of 1.5% when only 0.9% had been anticipated – the fastest pace for four years. The South African rand continued to suffer reaching a fresh four year low against sterling and the US dollar as a state-owned electricity company began implementing rolling blackouts across the country and the countries central bank said they would not intervene in the rands recent declines. The Canadian dollar strengthened the most in a week against the US dollar yesterday due to improved retail sales from the previous months drop, showing that the economy is slowly recovering. The Hungarian forint also had a strong week amidst rumours that Hungary will avoid dramatic policy measures to help foreign-currency debtors. Call in now for a live price and a market update.

A neutral UK budget helps sterling | Smart Daily Currency Note

Sterling

In arguably the biggest sterling news day of the year we saw a one-and-a-half cent range for sterling as it reacted to the day's events as they unfolded. Prior to the release of the minutes from this month's Monetary Policy Committee (MPC) meeting  sterling weakened as there was a belief they would support further quantitative easing. That belief was misplaced, and the early sterling losses were more than undone by a one cent jump in rates. Then budget concern kicked in to undo the gains, but the concern was also misplaced. In his speech George Osborne announced that the Office for Budgetary Responsibility forecast that the UK will leave recession by the end of the year, and set out a budget to drive the growth necessary to do so. He announced a new remit for the Bank of England saying that the 2% inflation target is "necessary but not sufficient", and that Mark Carney's bank should be able to focus on growth as well as inflation, much as the American Federal Reserve does. The Chancellor announced a 1% cut to corporation tax, as well as national insurance relief for small businesses. The pro-growth, pro-business, budget saw sterling drive back up, and settle at 1.5130 against the US dollar, and 1.1685 against the euro at the close of play in London. Today is unlikely to see the same level of volatility although any news from Cyprus is likely to cause a market reaction, with the only significant UK release being retail sales in the morning  and we have to look back as far as October for good news from the retail sector. Get in touch now to discuss the effect of the budget, and to get a live rate.

Euro

After a tough few days for the euro, yesterday saw some respite in the decline as the euro strengthened against the US dollar and sterling as solutions for the Cyprus problem still seem possible. The ECB stated that it remained committed to providing liquidity in the troubled state, easing some of the more immediate fears surrounding the Cypriot bailout. After the Cypriot government's decision to reject the initial bailout proposal, possible solutions have continued to be sought in the form of continuing negotiations to agree a deal with the ECB as well as seeking financial help from Russia. There is still a great deal of uncertainty surrounding how events will unfold and it was recently announced that Cypriot banks will now stay shut until Tuesday 26th to prevent mass withdrawals. Manufacturing data from Germany and France may also have an impact on performance, but is likely to be overshadowed by other events. The euro may weaken further if some sort of agreement is not reached in a timely fashion. All eyes remain on Cyprus. Call in now for live rates and up to date information.

US dollar

Yesterday was not a good day for the US dollar, declining against all of its major peers – including a drop  to 1.2980 against the euro as alternative ideas to the proposed Cypriot bank levy were being discussed whilst reaching new lows against sterling following the release of the Bank of England’s MPC meeting minutes. As widely expected, the Fed decided to leave the stimulus tap wide open for the time being, despite recent encouraging developments on the domestic economic front. The current asset purchase program will continue at the previous $85 billion monthly rate for now. Moreover, we saw modest changes to its near-term outlook for GDP growth, seeing a 2.3 to 2.8% rise on a Q4 to Q4 basis this year, compared to the previous 2.3 to 3..0%. Today will be another busy day for the US dollar with a few important releases bringing the possibility of volatility to the markets. The weekly unemployment claims is forecast to increase along with the existing home sales statistics, whilst the Philly manufacturing index is expected to show a much lower drop in the sentiment. Call in now for a live US dollar rate and a market update.

Worldwide

Elsewhere, the Russian rouble had a strong day yesterday, climbing the most in over two months against the central bank's USD/EUR basket. This is in part due to a rise in the price of oil and an increase in demand for the rouble for tax receipts. The Hungarian forint strengthened for a second day in a row yesterday following speculation that Hungary will avoid dramatic policy measures to help foreign-currency debtors. Late last night we had the release of GDP data from New Zealand and later on today we will see retail sales data release in Canada. Get in touch for the latest rates.

Cyprus, UK budget - a busy day for news | Smart Daily Currency Note

Sterling

Sterling had a positive day yesterday, in particular against the euro– reaching 1.1750 before retracing as investors are treating sterling as a relative safe haven due to the uncertainty surrounding the events taking place in Cyprus. The inflation data released yesterday will disappoint consumers, showing a small increase to 2.8%, squeezing the general public’s pockets ever more.  Wednesday will be an extremely busy day for the UK, with several key releases creating the potential for a great deal of market volatility. The Bank of England's Monetary Policy Committee minutes released this morning will reveal the outcome of votes from the March meeting. Markets expect an unchanged outcome with 3 members voting for more quantitative easing – should this number increase to 4, you can expect sterling to suffer. We will also have the annual budget from the Chancellor  which will be watched closely for any reforms that could boost growth in the UK - however no major change is expected, remaining broadly unchanged relative to the December Statement.  Today we will also see a raft of labour related data released, with the overall  unemployment rate predicted to remain unchanged at 7.8%, whilst another drop in the number of people claiming unemployment related benefits is expected. Call in now for the latest update. 

Euro

Contagion is the word on trader's lips this week, as the chaos in Cyprus threatens the stability of the euro. Rumours were abounding over the resignation of the Finance Minister, highlighting the uncertainty surrounding affairs in the region. The debate ahead of the crucial vote on the IMF bailout began last night with many, including the Minister for Defence, expecting the motion to fail. Yesterday evening we saw this expectation come to pass and parliament  rejected the bank levy bill. The rejection of the bailout – some say - amounts to a vote to leave the Eurozone, so the consequences could be dramatic but the market reaction has been muted. While the flexibility shown in regards to the Greek bailout would lead you to believe that Europe would give them a second chance, on-going uncertainty does not bode well for the 17 nation currency either way. After dropping to levels not seen since November yesterday against the US dollar we wait to see how low can the euro go. Get in touch with your trader to find out.  

US dollar

A risk adverse market helped the US dollar to perform relatively well yesterday, in a day that was dominated by news from the Eurozone. As well as making significant gains against the euro, the US dollar also strengthened against the majority of its major peers after building permit data coming in slightly better than forecast. Whilst events surrounding the Cypriot bailout are likely to continue to dominate market chatter, today also sees the Federal bank announce its decision on monetary policy. Whilst no change is expected, the economic predictions regarding inflation and economic growth by the Federal Open Market Committee will be watched closely by market analysts. Call in now for live rates and up to date information. 

Worldwide

Elsewhere, the South African rand saw a big slide today, dropping 0.8% against the US dollar bringing its total fall to 8.5% this year. A state-owned electricity company began implementing rolling blackouts across the country, due to concerns over both coal supplies and South Africa's reserve power margin. Furthermore, market uncertainty following the problems in the Euro zone has led to a general sell-off in high-risk, emerging-market assets, of which the rand is one. Similarly, the Polish zloty had a very weak day, suffering the same affliction as the higher yielding South African rand. Conversely, we saw a very strong day for the Japanese yen as investors bought up safe haven currencies. The Norwegian krone suffered following its central bank all but ruling our an interest rate hike in the near future. Call in now for a live price.

Cyprus shows that politicians never learn | Smart Daily Currency Note

Sterling

Sterling rose against all but three of its 16 major peers yesterday as risk aversion swept through the market. It strengthened the most against the euro reaching a five-week high after the proposed levy on bank deposits in Cyprus was announced. Today we will see a raft of inflation data out of the UK, with Consumer Price Index (CPI) expected to rise to 2.8%, marginally above the 2.7% reading we have seen for the past four months. The Bank of England (BOE) has recently warned that inflation might stay above its 2% target for the next two years. Tomorrow we have the minutes of the last Bank of England meeting released and the UK spring budget. Therefore given what is happening here and elsewhere the likelihood of volatility is high, so please call in today for the latest news from your trader.

Euro

The euro had a torrid start to the day yesterday, dropping the most in fourteen months before stabilising in the afternoon. The mass euro sell off followed news over the weekend that Cyprus must raise 5.8. billion euros through taxing deposits in order to secure the 10 billion euros bailout it requires. Yesterdays vote on the tax was delayed until today with Cypriot banks shut until Thursday 20th. Since then, there have been developments and last night the ECB agreed to ease the terms of the levy for smaller depositors; but, stated that the revenue target remains the same. The fear of contagion is evident in the markets and you do wonder if there will be a run of the Cypriot banks once they open for business as savers move their funds elsewhere. This would create another funding crisis for Cyprus. However a  former Central Bank of Cyprus governor has highlighted that should parliament vote against the bank levy, it would cause "chaos", which seems likely as at least one major Cypriot bank would more than likely go bust. Economic sentiment data will be released today, but you can expect it to play second string to any news coming from Cyprus. Call in now for the latest update and a live price.

US dollar

It was a fairly quiet day for the US dollar yesterday with little being released in the way of influential data. The result being that performance was largely dependent on international events elsewhere. Little change was registered against sterling as the rate remained marginally around 1.51; but, we saw a knee jerk reaction against the euro, dropping to 1.2880 before the euro recovered some of these losses later on. Today sees the release of monthly US building permit data, which gives some indication as to what can be expected from the construction industry over the coming months. The data is predicted to show a marginal improvement on last month in line with a gradual US recovery. Call in now for live rates and up to the minute information.

Worldwide

Elsewhere, the Swiss franc and Japanese yen both strengthened yesterday largely based on concerns emerging from Cyprus. The appreciation of the Swiss franc and the Japanese yen came as people turned back to safe haven currencies once more following the new bank levying plans that need to be enforced for Cyprus to receive its bailout funds. The Australian dollar struggled based on a nervy outlook on the situation in Europe whilst traders awaited the minutes from the latest monetary policy meeting from the Reserve Bank of Australia. The Hungarian forint continued its decline following the appointment of the new central bank governor and due to the governments recent comments about reducing the level of private FX debt. Call in now for a live update from the markets.

Cyprus shockwaves undermine the Eurozone | Smart Daily Currency Note

Sterling

Sterling performed relatively well on Friday following comments from the Governor of the Bank of England who said that the central bank is not actively trying to devalue sterling, furthermore stating that he does not think that it will drop much further. It is an extremely important week for sterling with two hugely influential releases in the form of the Chancellors budget and the minutes from the latest Bank of England Monetary Policy Committee (MPC) meeting. The market will look to the meeting minutes to see if any more of the MPC members voted in favour of increasing the current levels of quantitative easing, whilst traders will pay particularly close attention to the Chancellors budget. We also have key inflation data, retail sales figures and statistics showing the change in the number of people claiming unemployment related benefits. With so much happening in the UK this week, there is a high probability of increased volatility and the potential for dramatic downside movements should we see a raft of negativity. Call in now to speak to your trader and to see what you can do to protect yourself from adverse market movement.

Euro

The euro has been sold off heavily over the weekend, dropping against all of it major trading partners following the news that the EU and IMF have imposed a one-off levy on all bank customers in Cyprus in the region of 6.75-10% in return for the 10 billion euro bailout. This has caused widespread panic and send shockwaves through the markets, but, the decision to impose the levy still needs to be passed by the Cypriot parliament today - and the markets are nervous that parliament may instead vote to leave the Eurozone. This week's performance also depends very much on various data released from Germany including the results of the monthly economic sentiment survey and German manufacturing data. We also have services and manufacturing Purchasing Managers' Index (PMI) data released across Europe which will give further indication of how fragile the regions economy is. Call in now for up to date rates and information.

US dollar

The US dollar had a poor day on Friday, dropping quite heavily against the majority of its trading partners. This was in part down to the release of the Core CPI inflation data, showing the change in the price of goods and services purchased by consumers remains contained, meaning it is less likely that the central bank will tighten monetary policy in the near term. Other data released showed that both consumer sentiment figures and the empire state manufacturing index came in short of market estimates. This week sees the release of a few important pieces of data. On Tuesday we see the release of building permits statistics - a good gauge for the future of the construction industry. On Wednesday we have the monetary policy decision from the Federal Reserve. No change is expected, but the comments that follow on the quarterly economic projections, showing the predicted levels for inflation and economic growth is likely to cause a reaction in the markets. Other data released this week includes existing home sales, weekly unemployment claims and the Philly manufacturing index. It is set up to be an interesting week for the US dollar, so get in touch for the latest rates.

Worldwide

Elsewhere, the Polish zloty was one of the worst performing currencies on Friday after data released showed that growth was slowing by more than oringinal forecast. In Japan, parliament has now finally approved the three men to head up the Bank of Japan all of who favour loose monetary policy. This weeks main releases includes the minutes from the latest monetary policy meeting from the Reserve Bank of Australia, GDP data from New Zealand and retail sales figures from Canada. Call in now for a live quote.

Is this a short term bounce for sterling? | Smart Daily Currency Note

Sterling

I can't remember when last I was able to write that sterling is at a higher level against both the euro and the US dollar than this time last week. However this was on the back of good US economic news rather than good UK economic news as sterling gained a cent from recent lows, breaking through the 1.51 level against the US dollar and the 1.16 level against the euro. Reports suggesting Qatari officials have held talks about investing in infrastructure projects in the UK also helped. The bad news is that lots of economists are also suggesting that this gain was actually based on investors taking their profits on bets against the pound, and not on any underlying economic strength. As a consequence, the recovery looks fragile; limited support for government policy, the recent credit rating downgrade and speculation that the Bank of England will extend monetary easing all add up to create a poisonous cocktail for sterling. Indeed, HSBC yesterday downgraded their 2014 forecasts for the US dollar rate to 1.46 and the euro to 1.0420. Uncertain times indeed. Get in touch now for the latest news on this recent rally, and for up to the second rates.

Euro
It has been a mixed week for the euro, with a mid-week slump causing the euro to trade at well below 1.30 against the recovering US dollar, before regaining some lost ground at the end of the week. Early poor performance was due to a number of factors, among them the failed Italian debt auction and the comments from the German finance minister suggesting that a bailout package for Cyprus would not be agreed until further bank restructuring had occurred. Today, the EU summit goes into its second day of talks and much like yesterday, the discussions will no doubt have an impact on the euro, so keep an eye out for the market reaction. Elsewhere, we will see the release of Consumer Price Index (CPI) data for the past month, illustrating inflation in real terms. The outcomes of this will also be reflected in the markets. Get in touch for the latest rates and up to date information. 

US dollar

The US dollar began the week fairly quietly, that is until very strong retail data was released on Wednesday, giving further backing to a continued US economic recovery, helping boost the US dollar across the board by as much as a cent against the euro and reaching a two and a half hear highs against sterling, The good news has continued through the week with strong employment data released yesterday showing the number of new people claiming unemployment related benefits had risen by less than expected. We also seemed to see a return to US dollar weakness on good economic news and therefore increased risk aversion. It is another busy day for data in the US today with releases including consumer sentiment figures, core inflation data and industrial production statistics. The US dollar has been extremely strong recently; but, was softer yesterday, call in now to see how this trend could continue.

Worldwide

Elsewhere, the Hungarian forint was one of the biggest movers this week due to fears surrounding the actions taken by the new central bank governor over inflation; but, the vice governor of the central bank also stated that the recent weakness was “unwelcome”. The Japanese yen had a busy week recovering from a three and a half year low against the US dollar after the opposition party suggested it would oppose the nomination of Iwata as governor of the Bank of Japan – the upper house vote where the opposition party has the majority is being held today. The Australian dollar performed well yesterday after a strong jobs report was released showing a sharp increase in the number of new people employed in the last month causing unemployment to fall by more than anticipated. The Swiss National bank left its central bank interest rate unchanged and reaffirmed that is will defend the EUR/CHF 1.20 cap with unlimited funds. Call in now for a live quote.

Sterling gains slightly against the euro | Smart Daily Currency Note

Sterling

Sterling finally enjoyed a little respite yesterday, notably gaining nearly a cent against the euro and trading back above the 1.15 mark for most of the day. The relief came after five days of negativity as markets began to view sterling as undervalued in light of speculation that next week's budget will delay fiscal austerity measures. Today is once again quiet on the data front, but with markets and the news full of chatter about Mr Osborne's budget next week we could see volatility nonetheless. With some analysts even citing 1.50 as a new high point for the US dollar rate, sterling is certainly not out of the woods yet. Get in touch for the latest news and up to the second rates.

Euro

The euro struggled yesterday, dropping across the board on the back of worse than expected industrial production figures, notably falling a cent against the US dollar to well below the 1.30 mark – a three month low. An unsuccessful Italian debt auction underlines the apparent instability in the region, and further weakened the single currency. Today is the first day of the EU economic summit, so we can expect some volatility as markets react to news, particularly after MEPs yesterday rejected the ground-breaking budget proposal spearheaded by David Cameron. Get in touch for up to the second rates, and breaking news from the summit.

US dollar

The US dollar performed well yesterday on the back of better than expected retail sales data for February being released in the morning. The US dollar strengthened to a three month high against the euro, ending the day in London below 1.30 despite showing some signs of recovery towards the end of the day. There was no significant change in the sterling-dollar rate. Today sees the release of more unemployment data from the states. Positive unemployment data has recently boosted the US dollar as the world's largest economy continues on the road to recovery. The monthly producer price index is also expected to contribute towards the US dollar's continued ascent when it is released this morning. Call in now for the latest live rates and information.

Worldwide

Elsewhere, the Hungarian forint gained some ground yesterday for the first time in four days after comments from the vice governor of the central bank said the recent weakness was “unwelcome”. The New Zealand dollar dropped against the majority of its peers in advance of last night’s central bank policy meeting where it held interest rates. Today all eyes will be on Australia with key employment data coming out with the unemployment rate expected to rise to 5.5%. The Swiss franc continued to perform well yesterday in advance of today’s Swiss Central Bank policy meeting. Call in now for a live quote.

Sterling continues to struggle | Smart Daily Currency Note

Sterling

Sterling started Tuesday badly, weakening against the majority of its trading partners (falling to another yearly low against the US dollar and levels last seen in 2010), due to unexpectedly poor manufacturing and industrial output data showing further contraction. The trade deficit was narrower than expected but the house price balance declined. It was also reported that the future Bank of England (BoE) Governor (currently the Bank of Canada Governor) met with a UK top treasury civil servant to discuss potential changes in UK's monetary policy. A GDP estimate released from the National Institute of Economic and Social Research (NIESR) suggested the UK contracted by 0.1% in February whist revising January's estimate up to 0.0% from -0.2%. Sterling regained some of its losses throughout the rest of the day, but, expect the markets to remain extremely nervous ahead of next weeks BoE meeting minutes being released and the Chancellors Budget announcement. We have a quiet rest of the week in terms of UK data released, call in now for the latest live rates and updates.

Euro

It was a busy day for the 17- nation currency yesterday, swinging in both directions against all of its major peers, peaking at 1.1370 against sterling - the same level that was reached two weeks ago following the downgrade of the UK's credit rating. Towards the end of the day the euro lost ground after comments from the German finance minister who suggested that Cyprus would not be granted a bail out until some form of bank restructuring had been agreed. Furthermore, he also suggested that the "crisis is not over despite the recent calm on financial markets." Today the January industrial production figures for the Eurozone are released with markets expecting to see production shrink by 0.1% following Decembers improvement of 0.7%. Traders will be paying a watchful eye to the EU Economic Summit starting tomorrow, which is likely to bring more volatility to the market, so call in today for the latest news from the Eurozone

US dollar

The US dollar had a mixed day yesterday, benefiting against sterling following the release of very weak manufacturing figures in the UK which helped push the US dollar to a two and a half year high. The afternoon, however, saw rates climb back up to the levels seen in the morning to end trading in London back up around 1.49. Conversely, the US dollar did poorly against the euro during yesterday afternoon, before recovering, with the euro dollar rate ending the day in London at just above 1.3. This afternoon sees the release of two key retail statistics, both of which are expected to bring positive news - which would give further indication of a continued US economic recovery and give greater support to the US dollars recent strength. Call in for the latest rates and up to date market information.

Worldwide

Elsewhere, the Hungarian forint was the worst performing currency yesterday, falling against all of its major trading partners due to fears surrounding the actions taken by the new central bank governor over inflation. The South African rand was also particularly weak following the nations account deficit widening by more than originally forecast in the fourth quarter of 2012. The Japanese yen recovered from a three and a half year low against the US dollar after the opposition party suggested it would oppose the nomination of Iwata as governor of the Bank of Japan. This evening we have the Reserve Bank of New Zealand's interest rate decision - expected to be help at 2.5%. Call in now for a live quote.

Sterling under pressure and no relief likely today | Smart Daily Currency Note

Sterling

Yesterday came in two halves for sterling, with a strong dollar driving the US dollar rate down to levels not seen since the summer of 2010 in the morning, but recovering through the afternoon to undo most of the losses by the close of trading in London. Today sees the release of monthly manufacturing production figures, a key indicator of UK economic health. The figures are expected to show a sharp drop in growth rates but remain in positive. Given the recent Purchasing Manger Index figures from the manufacturing sector, it would seem optimistic to hope for a good outcome for sterling. Trade balance figures released at the same time look set to show that the imbalance between imports and exports remains on a par with last month, so short of a big surprise, market reaction to this data is likely to be muted. Call us now for the news and live prices. 

Euro

It's all quiet on the European front today, with nothing in the form of influential news released, so expect it to be a day for reaction to international news rather than affairs closer to home. Yesterday morning saw French industrial production disappoint, and the euro slip a little against the dollar. The euro did manage to undo early losses to close back up above the 1.30 mark. Despite the poor figures, the euro remained a more appealing prospect than sterling to investors, and pushed the rate down ever closer to 1.14. Get in touch now for the latest news, and up to the second rates for the euro. 

US dollar

While there was little data released yesterday, the market for US dollars was not so quiet, and the dollar struggled to hold its own later on in the day. The result was a volatile day, notably undoing early gains to slip back over the 1.30 mark against the euro. Markets are full of chatter as to when the stimulus programs will be brought to an end, a question which the Federal Reserve Chairman failed to clearly answer. Today's Federal Budget Balance data takes on more importance than usual in light of the potential impact of sequester spending cuts aimed at returning to a surplus – unlikely any time soon given the forecast deficit of 220 billion dollars. Call in now for a market update and a live quote.

Worldwide

Elsewhere, the Brazilian central bank intervened today to weaken the local real from recent highs, driving the rate down by almost 1%. The Australian dollar won back recent losses caused by poor Chinese manufacturing data, to gain against most major peers. The South African rand could not emulate this performance and slipped further, notably losing half a percent against a strong US dollar. Today, the focus returns to Japan, and the target of 100 yen per dollar following on from Monetary Policy minutes, and manufacturing figures released overnight. Get in touch now for news on your currency. 

Sterling loses ground against the US dollar | Smart Daily Currency Note

Sterling

Sterling continues to be one of the weakest currencies with little support from investors. Strong employment data from the States on Friday afternoon saw sterling rapidly lose over 1 cent , ending up close to 1.49. This week could well be a similar story, with little UK data being released that will really influence the value of sterling so expect rates to be driven by news from elsewhere. The big day for UK economic data is Tuesday when manufacturing and industrial production figures are released. A sharp drop off in growth is forecast, in line with the recent Purchasing Manager Index figures. Trade balance figures are also released on Tuesday and are not forecast to change, so little market reaction is expected. Get in touch now for  the latest news and up to the second rates.

Euro

The euro was similarly affected on Friday, hovering back around the 1.15 mark against sterling but losing ground rapidly against the US dollar. Thursday and Friday will see traders focus on the EU economic summit with a potential Cypriot bailout on top of the agenda. Any hints of decisive and early action will lend support to the notion of a strong and reliable Eurozone, improve business confidence and consequently give strength to the euro. Industrial and manufacturing data released this week will highlight a two speed Eurozone economy with Germany continuing to grow while a lot of the rest, including France, continue to struggle. Any surprises will lead to volatility for the euro. Call us for news and live rates for the euro.

US dollar

It was a completely different story for the US dollar on Friday as employment data vastly exceeded expectations, showing a 0.2% decrease in unemployment. The US dollar jumped over a cent on the news, driven in part by the implication that a rise in interest rates might be closer than we thought as the labour market is recovering faster than expected. Given the dramatic shift on Friday, expect the eyes of the markets to be focused on Thursday's weekly unemployment figures . Both the retail sales figures and the Purchasing Price Index are expected to improve on the previous month highlighting that the recovery Stateside is gathering momentum. We should expect the US dollar to at least hold its ground. With trading opening below the key 1.50 level against sterling in Asian markets, the question this week is whether it stays there. Call in now for an update and the latest prices. 

Worldwide

Elsewhere, the Japanese yen was once again in free-fall late last week reaching levels not seen since August 2009 at over 96 against the dollar. The key question this week is whether the story will continue, and drive on towards the 100 mark, that Japanese policymakers say they consider an appropriate level to help drive up exports. Unemployment is forecast to rise in Australia with figures being released on Thursday, making it seem unlikely that we will see a dramatic recovery from last week's lows. The New Zealand Reserve Bank looks likely to hold interest rates again on Wednesday evening, as are the Swiss National Bank on Thursday. Get in touch now for the latest news, and up to the second rates on your currency pair.

A poor end to the week for sterling | Smart Daily Currency Note

Sterling

This week has been a tumultuous one for sterling as it began the week in the ascendancy on Monday and Tuesday as traders felt sterling had been oversold. Despite disappointing Construction Purchasing Managers' Index (PMI) data being released on Monday, Tuesdays Services data detailed a significant  increase in business activity in the service sector for the second consecutive month suggesting the economy may avoid a triple-dip recession. Tuesday afternoon, however, saw the tides turn again as speculation grew that the Monetary Policy Committee may extend its quantitative easing programs causing sterling to fall below the 1.50 level against the US dollar – a two and half year low. However, as many (but not all the major banks) had predicted, the Bank of England held its asset purchasing programme whilst keeping rates unchanged. This decision caused a knee-jerk reaction in the market pushing sterling up against its major trading partners. We can expect the same sort of volatility when the minutes from this week's meeting are released in two weeks as traders look to see how close the vote was. The afternoon saw much of the early gains slip away, with sterling dropping well below the 1.15 level against the euro, and once again pushing toward 1.50 against the US dollar. Today will be in comparison a quieter one for sterling data with much of the focus on the jobs data out of the States; however, it’s impossible to deny that sterling remains under pressure, so get in touch now for the latest news, and for an up to the second quote.

Euro

The euro had a strong end to the week following some much needed positivity being brought to the markets after the President of the ECB suggested the region’s economy will stabilize this year and that their approach to supplying liquidity will be to supportive to growth. This positivity came in spite of political uncertainties in Italy, revised GDP data confirming that the euro-area contracted by 0.6% for the fourth quarter of last year, worse than expected investor confidence figures and below forecast services Purchase Managers' Index data. On a more positive note, retail Sales in the whole area were better than predicted showing an improvement of 1.2% and whilst Spanish unemployment increased, it was at the slowest pace since after the start of the crisis. Today sees monthly German Industrial Production data released, forecasted with the increase of 0.6% giving a brighter economic outlook for the euro-area. Call in now for the latest news from the Eurozone and live prices on the euro.

US dollar

It has been a mixed week for the US dollar, starting the week stronger on the back of data showing that the services sector experienced the fastest growth in a year last month boosted notably by demand for exports which also helped push the Dow Jones to record highs. Strong labour data in the form of weekly unemployment claims and the ADP employment rates in midweek, helped support the US dollar – pushing it to a two and half year high against sterling and points towards a positive reading for today’s highly influential non-farm payrolls figures. These gains were then countered by the monthly trade balance. Released on Thursday, the results were poorer than expected coming with a deficit of $44.4 billion. This brought the US dollar back down to the 1.31 level against the euro.  As aforementioned, todays non-farm employment data will be the main release on the economic calendar, alongside the overall rate of unemployment – especially with the Federal Bank’s monetary policy so closely intertwined with an improving labour market.  Positive releases should enhance the dollar's position, possibly raising it to new highs for the year.

Worldwide

Elsewhere, the Japanese yen was once again the main talking point of the week, dropping to its lowest level since August 2009 against the US dollar  following the Bank of Japan keeping interest rates unchanged at 0-0.1% by unanimous vote. The markets suggest the incoming Governor will look to increase monetary stimulus and debase the currency. The Swedish krona performed well as its central bankers stated that they would not look to devalue the krona in spite of its recent strength, commenting that currency's level was "not in any way remarkable". The Polish zloty struggled  owing to Poland's Central Bank cutting interest rates to 3.25%. The South African rand dropped to its lowest level in nearly four years against the dollar following labour protests at mines spurring violence, a repeat of last year which curbed production. The Hungarian forint struggled after markets speculated that the central bank may use its foreign-currency reserves to give the economy a boost. Overnight we saw the release of Japanese current account data and the Chinese trade balance. This morning we will see inflation data for Switzerland and this afternoon we will have a raft of unemployment related data from Canada. Call now for the latest news and updates.

Sterling at risk from today's BoE decision | Smart Daily Currency Note

Sterling

Sterling struggled yesterday, losing ground against most of its major peers, giving back its recent gains to head back down towards the 1.50 mark against the US dollar. The driving force behind this decline was speculation that the Bank of England Monetary Policy Committee would today increase its quantitative easing programme in an effort to boost the recovery. While the markets are full of chatter of a potential change, especially after 3 members voted in favour last month, it would be a surprise according to many, including major banks - implying that any increase would see a big reaction in exchange rates. All will be revealed at noon so call in for an update and the very latest rates.

Euro

The euro fell against the US dollar yesterday, settling below the 1.30 line; but strengthened against sterling as traders mull over the idea that the Bank of England could loosen monetary policy. Revised GDP data from the euro-area as a whole came out as expected with a drop of 0.6% for the fourth quarter of last year. Today will see a lot of important data released, starting with a Spanish and French 10-year Bond Auction results. Later on, German factory orders are predicted to show an increase of 0.6% hopefully signalling an end to weakness in the industrial sector. The most anticipated release though is the European Central Bank (ECB) rate decision with much of the focus on the press conference that follows which often causes volatility in the market, so call in now for the latest news and changes in the euro rates.

US dollar

The US dollar enjoyed a strong day, making gains across the board after an influential employment release came in much better than expected. Notably, the US dollar made gains for the first time in three days against the euro to push back down below the 1.30 mark. Key releases this morning include trade deficit figures and the weekly unemployment figures both of which are forecast positively, which ought support continued dollar strength. That said, its likely to be a day for reaction with central bank announcements elsewhere. Get in touch now for the latest news and prices.

Worldwide

Elsewhere, the Polish zloty endured a very weak day today owing to Poland's Central Bank cutting interest rates to 3.25%. The Australian dollar was one of the best performers following GDP data showing the Australian economy grew by 0.6% in the 4th quarter. The Bank of Canada kept rates unchanged yesterday, but PMI data came out a lot worse than expected causing the Canadian dollar to weaken. Overnight we had the Bank of Japan's monetary policy decision, trade balance data from Australia and later on today we have trade balance data and building permits figures released from Canada. Call in now to lock in a price.

We wait for Thursdays Bank of England announcement | Smart Daily Currency Note

Sterling

Sterling had a mixed day yesterday - hitting highs of 1.52 against the US dollar and 1.1645 against the euro in the morning before pulling back in the afternoon. Sterling  got a helping hand from positive data released yesterday morning. Statistics showed that retail sales had increased by 2.7% in February and then the Services Purchasing Managers' Index (PMI) data detailed a significant  increase in business activity in the service sector for the second consecutive month suggesting the economy may avoid a triple-dip recession. However what prevailed over the day were the talks about the fact that sterling could still be overvalued alongside speculation of another round of quantitative easing at Thursdays central bank meeting. Today sees the Governor of the Bank of England's testify about banking standards before the Parliamentary Committee. Sterling remains under significant pressure from the market so call in now for the latest news and changes in the rates.

Euro

The euro had a mixed day yesterday. Alongside concerns towards political uncertainties in Italy, overall sentiment towards the currency was negative due to concerns on the Eurozone economy in general. Governments functioning under the monetary union face record-high unemployment, with a number of European policy makers unwilling to address the debt crisis any further.  Although retail sales rose, and the overall Services PMI figures actually came our above market expectations – it still showed an overall contraction of 47.9. The Spanish reading was much worse than expected and the Italian figures showed a deep industry contraction. On a more positive note – the German figures were better than expected which point to a recovery for the European powerhouse. We have a quiet day for data coming out of the Eurozone today with the main focus on the European Central Bank press conference held this Thursday, with people expecting a more positive tone for monetary policy. Call in now for the latest news and changes in the euro rate.

US dollar

A new all-time high on the Dow Jones lent support to the US dollar; but, it actually ended the day weaker against 9 of its 12 major currency peers. Data released in the afternoon showed that the services sector experienced the fastest growth in a year last month boosted notably by demand for exports, which should lend support to a stronger dollar moving forward. Today sees the release of influential employment data. With the last few months coming in better than expected, and the Federal Bank having made clear its mandate for interest rates would remain unchanged until the labour markets recovered, expect traders to watch the release with a keen interest. Get in touch to find out where the dollar is trading right now.  

Worldwide

Elsewhere, the Australian dollar recovered from earlier lows as the Bank of Australia held interest rates unchanged at 3.0% - a 50 year low, with the Governor of the central bank saying that the low rates were having the intended effects. The Swiss Franc lost ground against the euro as it strengthened from recent lows, in spite of last month's assertion from the Swiss National Bank that the peg should be maintained at all costs. The Swedish krona performed well yesterday as its central bankers stated that they would not look to devalue the krona in spite of its recent strength. Today, the Canadian central bank releases its interest rate decision, the second of no less than 5 countries to do so this week, and it's expected to remain unchanged at 1%. If it indeed is, expect yesterday's small gains to continue today. Get in touch now for the latest news and up to the second rates for your currency pair. 

Sterling steady pending Thursdays Bank of England meeting | Smart Daily Currency Note

Sterling

Traders have obviously come to expect poor data from the UK as yesterday’s worse than expected Construction Purchasing Managers' Index (PMI) data mirrored Friday's Manufacturing release, but caused next to no reaction in the market. Whilst sterling dipped its toe in the waters below 1.50 once again in early trading, it recovered through the day to a high just above 1.51 against the US dollar, and over 1.16 against the euro. The recovery would indicate that markets see sterling as being undervalued at these low prices, but with Services PMI released this morning, and the Monetary Policy Committee releasing monthly asset purchasing and interest rate figures on Thursday, sterling is certainly not out of the woods yet. With the Governor of the Bank of England speaking tomorrow as well, we can expect the volatility to continue as traders place their bets ahead of Thursday as to whether quantitative easing will be extended or not. Call in now for the latest news and prices.

Euro

The euro suffered yesterday as the political turmoil in Italy continues to drags on, causing the euro to fall below the 1.30 mark against the US dollar and to weaken to above 1.16 against sterling. Spanish unemployment figures showed that whilst unemployment was still rising, the increase was at a much slower pace. Investor confidence figures released yesterday morning were much worse than expected. The Economic and Financial Affairs Council (ECOFIN) meetings today follow on from the Eurogroup meetings yesterday where finance ministers all meet to discuss the state of Europe and the Eurozone in general – with the bailout deal for Cyprus one of the main priorities alongside the Italian political deadlock. Services PMI data released today will be watched closely by traders – in particular the Spanish and Italian figures. Call in now for the latest news and changes in the euro rate.

US dollar

The US dollar traded on the side-lines yesterday as no important data was released. During the day, two Federal Reserve Governors were speaking on the challenges confronting monetary policy in what has been an unusually weak recovery from a severe recession, moreover, they were talking about the Federal Reserve’s progress  on ending the “too-big-to-fail” culture – to ensure taxpayers money is not used to bailout large financial institutions in the future. The market reaction to the stalemate of Fridays meeting has been fairly muted and President Obama has now suggested that he is willing to compromise to end the sequester. Today’s main release will be the monthly Non-Manufacturing PMI, which is currently forecast to show a small decline to 55.0 in February – but still demonstrating clear industry expansion. Call in now to get the latest news from your trader.

Worldwide

Elsewhere the Hungarian forint was the worst performer yesterday after markets speculated that the central bank may use its foreign-currency reserves to give the economy a boost. The Australian dollar struggled yesterday, falling to an 8 month low after new building data fell for a second consecutive month, before this morning's interest rate decision to keep interest rates at 3%. The Canadian dollar also fell to a similar low ahead of an interest rate decision on Wednesday as Traders bet on further weakness as commodity prices drop. Looking forwards, the biggest story this week is likely to be the Bank of Japan press conference on Thursday as the appointment process for the new governor draws to a close. Get in touch now for the latest news and prices.

Will we see more bad news for sterling this week? | Smart Daily Currency Note

Sterling

Friday's Manufacturing PMI release undermined sterling badly. Coming in three points below forecasts, the release indicates that that purchase managers expect a contraction in this key industry sector next month. Sterling plummeted on the news, losing Thursday's gains and more, falling below the 1.50 mark against the dollar for the first time in over two and a half years. This week is packed with major events for sterling with the release of similar data from both the construction and services sectors, both equally influential, on Monday and Tuesday. If they both disappoint as much as the manufacturing release did, it would not surprise if sterling settled below 1.50. The Governor of the Bank of England speaks on Wednesday, ahead of Interest Rate and Asset Purchasing releases on Thursday. Last month the path was lit for increased quantitative easing as the Governor, crucially, was one of three members of the Monetary policy committee voted in favour. If any move is made, expect sterling to suffer, and expect more volatility that usual ahead of the release as traders place bets on what will happen. Get in touch for the latest news and rates for the pound.

Euro

The euro struggled on Friday as figures showed that the overall level of unemployment had reached a new record of 11.9% whilst inflation figures also fell short of markets estimates. Manufacturing PMI released came out more or less as expected showing an overall contraction figure of 47,9 [above 50 is expansion], and the markets will look closely to the services figures today for influence. This week the focus will largely be on Thursday with the European Central Banks’s rate decision and press conference, furthermore, traders will play close attention to the Eurogroup and the Economic and Financial Affairs Council (ECOFIN) meetings that will take place. Uncertainty surrounding Italy's political future remains as the country remains in political deadlock following the recent electoral vote. Until there is some form of resolution the markets are bound to stay nervous. Call in now for the latest news and changes in the euro rate.

US dollar

The US dollar performed well on Friday as risk appetite dominated the headlines due to the sequestration cuts that came into effect over the weekend - dropping below 1.50 and 1.30 against sterling and the euro respectively. To date, there has been no progress and so $85 billion worth of spending cuts over the next fiscal year have been signed into effect, with $1.2 trillion worth of spending cuts over the next 9 years. The fear is that not only will this harm growth in the US; but, the knock on effect means it will harm global growth as a whole. Other data out on Friday showed that Manufacturing PMI data better than expected whilst consumer sentiment figures beat market forecasts. Non-Manufacturing PMI figures and trade balance data will be released this week alongside a raft of unemployment data which includes the highly influential non – farm pay roll data which will be announced on Friday and is always watched extremely closely by investors. The expectation is for 151,000 jobs to be added which is slightly less than last month's figure. Also, a number of members from the Federal Open Market Committees (FOMC) will be speaking this week and their comments have often caused volatility in the past. Speak to one of your traders to see how you can potentially make this volatility work in your favour.

Worldwide

Elsewhere, Manufacturing PMI data from China fell slightly short of market forecasts and Canadian GDP figures came out as expected showing the economy had contracted by 0.2% causing the Canadian dollar to weaken.There is a lot of data out this week and in particular from Australia with a swathe of information being released including monthly retail sales figures, GDP figures, trade balance data and the central bank’s interest rate decision which is expected to be kept at 3%. There is a raft of data out of Canada which includes building permits figure, trade balance data, unemployment data and the central bank’s interest rate decision. Also this week we have the Bank of Japan's monetary policy decision and inflation data and trade balance data from China. Call in now to lock in a price.

Despite tough week sterling slightly stronger | Smart Daily Currency Note

Sterling

Sterling had a very poor start to the week – dropping to a sixteen month low against the euro and a two and a half year low against the US dollar following  Moody’s - one of the big three credit rating agencies - downgrading the UK’s sovereign rating by one grade to Aa1 from Aaa. As the week went on, sterling performed fairly well, benefiting from the turmoil on the other side of the channel as investors looked for a safer haven asset in the region. Murmurings that negative interests could  potentially be introduced by the Bank of England rates were then quashed by another member of the Monetary Policy Committee, boosting sterling. Some analysts suggest that, while poor GDP results and credit rating downgrade have driven traders to bet on sterling dropping, those positions are now being closed out and the tide may be beginning to turn. Today sees the release of the manufacturing Purchase Managers Index (PMI) data which has been broadly positive recently - if it remains so, this would support the recent strengthening. Get in touch to find out whether sterling is holding ground.

Euro

The euro has struggled more this week than in any other week since the start of the year, with sterling finally pushing back up to the 1.16 mark yesterday after the European Central Bank President said that he has no intention of tightening monetary policy in the Eurozone any time soon. Falling inflation, and the potential for decreasing interest rates, compounded widespread uncertainty that has reigned throughout this week after the Italian electoral debacle. Today is likely to see the same story continue, uncertainty as Dutch budget deficits look set to exceed limits and the Italian parliament situation rumbling on, the euro looks a much riskier prospect than a week ago and traders are taking note. Get in touch now for the latest news and rates.

US dollar

The US dollar started strongly this week making gains against most of its currency partners, but some of these gains were lost as the week went on. Headlines were dominated by the Federal Reserve Chairman's two day testimony. The Chairman suggested the benefits outweighed the negative with regards to the central bank's asset purchasing program, backing the central bank's current stimulus program. The testimony gave no signs that the Fed may slow or even stop monetary easing, in spite of recent murmurings that the central bank may look to taper asset purchases later this year. The Chairman also maintained pressure on Congress to act to prevent the USD 1.2 trillion of spending cuts that are due to start taking effect as of today. Markets are unsure about the consequences of such cuts, hoping that a compromise is reached sooner rather than later. Yesterday we saw preliminary fourth quarter GDP data come out much worse than expected with a reading of 0.1%, when more substantial growth at 0.5% had been anticipated. Conversely, strong employment data showed that less new people were claiming in unemployment related benefits than expected. Today’s main release is the Manufacturing PMI data. Call now for the latest rates and updates.

Worldwide

Elsewhere, as has so often been the case recently – the Japanese yen was one of the main talking points. The yen fell as Japanese prime minister put forward his choice for the next governor of the Bank of Japan - Mr Karudo – a renowned advocate of monetary easing to boost growth; but, strengthened as risk aversion swept through the markets. The Russian rouble struggled  after GDP data released showed that the economy had contracted by 0.3%. The Indian rupee suffered yesterday after the Indian government’s budget set out plans to increase spending despite the fiscal deficit targets that are in place. Overnight we saw the release of more Manufacturing PMI data from China and later on today we see GDP figures announced in Canada. Call in now for a market update and a live quote.