Smart Daily Blog
Author: Charles Purdy
Published Date: 30th July 2010
EURO/GBP - 1.198
US$/GBP – 1.562
CHF/GBP – 1.621
CAN$/GBP - 1.613
AUS$/GBP – 1.736
NZD/GBP – 2.166
EURO/US$ - 1.303
Sterling hit a further 5 month high of $1.5660/£1 yesterday on speculation over month end ‘rebalancing’ after strong performances on the US stock market. Strong earnings from many US firms over the last week has left many analysts expecting investors to sell their US dollar share holdings, putting pressure on the US dollar. Sterling also broke through a key technical barrier on the graph this week, breaking through the 200 day ‘moving average’, which is a strong positive signal for sterling. In terms of data, house prices and lending data in the UK disappointed, which serves as a reminder that the UK is not quite out of the woods yet. There is little or no data out today for the UK – call in now for a live exchange rate.
In the Euro zone, German unemployment data came in better than expected, as the level of unemployment dropped by 20,000 – 2,000 more than expected. The euro maintained its relative strength against the pound, keeping sterling from breaking above the 1.20/ £1 barrier. In terms of data, there is German retail sales data and European inflation data alongside Italian unemployment figures. The Euro has had a relatively good week, but many are confused as to why the euro has performed so well, given the issues with sovereign debt in the region. Call in now for a live exchange rate.
In the USA, unemployment claims came in as expected with 457,000 people claiming unemployment benefits last month. With weak US data and relatively strong UK data, some analysts have been predicting prices above $1.57/£1 as the next realistic level. However, this is not expected to last long, as the effects of the long awaited ‘fiscal squeeze’ have yet to be seen and this is likely to impact on the price of the pound moving forward. Out later today, US GDP is the key piece of data and it is expected to show that the pace of the US recovery is slowing. Call in now for a live price to ensure you don’t miss out.
Elsewhere, Australian private credit figures came in worse than expected. This is a natural progression after an aggressive period of interest rate hikes. Analysts point out that an interest rate rise can take 6 months to feed into the economy, and this is clearly the case. Many are expecting that the Australian central bank will shy away from further rate rises for the rest of the year. Get in touch now to ensure you don’t miss out.
Exchange rates change every second - call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx
Author: Charles Purdy
Published Date: 29th July 2010EURO/GBP - 1.198
US$/GBP – 1.561
CHF/GBP – 1.646
CAN$/GBP - 1.615
AUS$/GBP – 1.735
NZD/GBP – 2.153
EURO/US$ - 1.302
Sterling breached the $1.56/ £1 barrier as investors ignored downbeat comments from the Bank of England Monetary Policy Committee after a run of better than expected UK data. The pound continued to ride the wave of strong GDP and better than expected retail sales data and this saw investors treat sterling with optimism. Bank of England governor Mervyn King warned that strong second quarter growth data should not mean that monetary policy should tighten up; pointing out that significant risks still face the UK economy and that interest rates could drop further if needed. The pound shrugged off these comments and continued to strengthen against the US dollar after poor data from the USA left investors feeling happier holding sterling. Out today there is key house price data and lending data. Call in now as this could take the edge of the pound’s strong run.
In the Euro zone, the euro weakened against sterling marginally and the pound briefly broke through the 1.20/£1 barrier before falling back off. Data from the euro zone showed that German inflation remained the same at 0.2%. Out later today, the key European data released is German unemployment figures which are expected to show an improvement, but not at the same rate as last month. There is still concern from some analysts that the euro is far too overvalued following the heavily criticized stress tests. Get in touch now to avoid losing out if the pound does jump.
In the USA, the US dollar fell against the pound after data on durable goods orders came in far worse than expected. ‘Durable goods’ orders are orders placed for the manufacture of trains, machines etc. – anything that takes several months to build. It is used as a measure of future growth in the economy, and this month showed a drop of 0.6% when it was expected to rise by 0.6%.The poor figures saw investors move funds into sterling as the UK is increasingly becoming a more attractive investment versus the USA. Get in touch now, as we have already seen further strength this morning from the pound.
Elsewhere, the New Zealand dollar fell against other currencies despite a widely expected interest rate rise, after the Royal Bank of New Zealand governor actively downplayed the recent strength of the NZ dollar and said that further rate rises should not automatically be assumed. Call in now for a live exchange rate.
Exchange rates change every second - call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx
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