Sterling
Sterling drifted through yesterday without making many waves and gaining slightly against the euro. This was despite the market starting to develop nerves as to the impact that the new Bank of England Governor Mark Carney may have when he starts on Monday. Modest gains in mortgage approvals indicate a recovering property market, matched by realised sales figures, perhaps Mr Carney is taking the reins of a horse that is finally gathering some speed. The incumbent Governor Mervyn King speaks this morning on economic stability, a speech which looks likely to be largely a hand over speech. We can generally expect volatility while he is speaking as traders listen for hints as to future monetary policy. Call your trader now for up to the second rates.
The euro struggled yesterday losing almost a cent to a buoyant US dollar, and half a cent to sterling, as ECB President Draghi said that the economic outlook still warrants an accommodative monetary policy stance. First thing this morning we have seen the release of consumer confidence data from Germany, but, with little data released from the rest of Europe today, the question is where the downward trend stops. If rates nudge through the 1.18 mark against sterling, we could see further gains for sterling, but that level hasn't been broken in 2 months so the chances are limited. A meeting between the Finance Ministers of the EU member states commences today and so any significant news emanating from these meetings could cause a notable reaction in the market. Call your trader today for the latest news and live prices.
The US dollar climbed yesterday as three key sets of data exceeded expectations. Core Durable Goods orders, not expected to rise, added 0.7% to last month's release. Consumer confidence, and New Home sales compounded the effect later in the afternoon adding support to a rising dollar and a recovering American economy. Positive fundamentals from the States are likely to have an exaggerated effect on currency values in light of the Federal Reserve's recent taper talk - a strengthening economy suggesting that a winding up of quantitative easing is close. Today is far quieter, the only major release being quarterly GDP figures. The preliminary figures were released a month ago meaning any effect will likely have already been seen - though any deviation from the 2.4% growth would shock markets. Call your trader to find out where the US dollar is trading now.
Elsewhere, the Japanese yen strengthened yesterday rebounding from two-week lows against the US dollar. Yen strength was a reflection of underlying nervousness in the global market, as concerns over a shortening supply of liquidity in China and the US raise demands in the short term for the relatively safe Japanese currency. The Canadian dollar had another tough day, although marginally better than we have seen over the last five days or so. The weakness yesterday was a response to strong data coming out of the US fuelling rumours that Canada's largest trading partner will slow monetary stimulus. The Australian dollar held ground against its main trading partners, hovering tentatively above 33-month lows against its US counterpart. The growing consensus is that the Aussie dollar will remain relatively low for the foreseeable future. The most notable piece of data released today is the monthly trade balance figures coming out of New Zealand. Call in for latest news and rates for your currency.
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