Sterling
Sterling had a day steady day yesterday as traders are nervous ahead of the UKs busy week of data releases and as the commodity market stole the headlines with Gold and Silver prices dropping by nearly 10% and 13% respectively. The markets are also having to digest figures from China showing that growth has unexpectedly slowed. It will be interesting to see if this week's data releases backup the belief that, at last, there is a sustainable but somewhat lethargic economic recovery in Britain. This morning's inflation release is expected to show inflation at 2.8%, so get in touch with your trader for market reactions.
The euro initially struggled yesterday against the US dollar, sterling and Japanese yen. Indeed, news that Cyprus looks likely to sell €400 million worth of its gold reserves was testament to a feeling of structural weakness across outlying member states as fears of Cyprus leaving the single currency were talked down. The decision is necessary in order to raise the €7 billion contribution that Cyprus must put forward in order to obtain the planned EU bailout, and is likely to underscore willingness by many central bank officials to ease monetary policy in the medium term. Today will see the monthly release of the European economic sentiment survey’s along with Core Consumer Price Index inflation figures. The survey is likely to have a direct impact on the value of the euro this week so get in touch for the latest rates.
The US dollar fluctuated throughout yesterday against most of its main counterparts. Both important data releases for the day were received with a degree of disappointment; firstly the New York Manufacturing Index showing conditions are improving at a much slower pace than predicted. Alongside this, figures on international demand for U.S. financial assets revealed a stark drop as investors sought shelter elsewhere throughout February although this was forecast to bounce back through the Spring. Today brings a brace of noteworthy events for the US dollar starting with the Residential Building Permits report followed by a Consumer Price Index release, though levels on both fronts are expected to remain constant. Call in today for the latest updates on the market situation and live price from our traders.
Yesterday saw the Japanese yen climb for the first time in two weeks, emerging as a safe haven asset following news that Chinese economic growth came in at 7.7%, below forecasts of 8%. The commodity backed currencies all struggled yesterday including the Canadian dollar dropping to the lowest point against sterling since February. Overnight, we saw the meeting minutes from this month's Australian monetary policy committee meeting released and later on today we will see manufacturing sales figures from Canada and key inflation data being released in New Zealand. Be in touch for how world currencies react in the wake of a potentially slowing Chinese economy with your trader.
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