Sterling
A fairly steady day for sterling yesterday in spite of disappointing manufacturing figures in the morning which showed contraction of 0.2% after two months of growth. Ground lost to the euro was regained in the afternoon with sterling finishing the day very close to the point it started against the euro. There was a similar result against the US dollar. A series of employment releases this morning will be the main driver for sterling today. The number of people claiming unemployment benefits is expected to have fallen from last month, a sign that recovery is moving forward. Call in today for a live price, and to find out how sterling is performing today.
Yesterday was a steady day for the euro as it saw little overall movement against sterling and the US dollar. Whilst there was little in the way of important data released yesterday, we did see the beginning of what could be an influential decision by the German Constitutional Court on the legality of the European Central Bank’s bond-buying scheme known as Outright Monetary Transactions (OMT). A ruling against the OMT would not bode well for the single currency as it would seriously hinder the scheme's effectiveness. Today will be the final day of the hearing and traders are likely to be watching developments closely, although a ruling is not expected until after the German election in September. Today also sees the release of monthly Eurozone industrial production figures, which have the potential to impact on the euro's performance during the day. Call in now to keep abreast of developments and get a live market rate.
In what was a relatively quiet day across the currency markets the US dollar saw relatively little movement yesterday, losing a little bit of ground against sterling and holding steady against the euro. After gaining support from an increased rating from credit agency Standard & Poor earlier in the week, there was little by the way of influential information released yesterday. Today however, we can expect some reaction to the release of a variety of data. Crude Oil Inventories and the monthly Federal Budget Balance, which reveals the difference between income and expenditure by the Federal Government, both have potential to cause volatility if figures differ from expectations. Monthly 10-year bond yields released today could also have implications for US dollar performance. Call in now for a live rate and market updates.
Worldwide
Elsewhere, the Japanese Yen had a very strong day yesterday, gaining one percent gains against all of its 16 major peers. The Yen strength was a response to the Bank of Japan opting not to increase easing methods that have been so influential on the value of the currency in recent months. We also saw Japanese current account data coming in stronger than forecast. The Australian dollar had a weak day yesterday. Falling to the lowest levels seen in three months against its US counterpart. The Australian dollar's poor performance was down to a combination of worse-than-expected home loans approval data and speculation that the US will reduce stimulus this year, narrowing Australia's interest rate advantage. In contrast to the Australian dollar's poor day, the Canadian dollar - another of the heavily commodity-backed currencies - had a strong day, rising to its highest level in three years against the Australian currency. The strength seen was a result of market speculation that the North American economy will see some consistent growth, driven by a healthy US economy across the border. Tomorrow we see the Reserve Bank of New Zealand short term interest rate decision in the morning. Get in touch to see how the markets react.
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