Dear Subscriber, Please find below today's update which gives you an insight into the current market conditions, enabling you to keep informed and up to date on the latest currency movements. GBPEUR/GBPUSD The Pound reached the highest level against the Euro in 18-months yesterday, as investors became increasingly concerned about the European debt crisis worsening and spreading to other high-deficit nations. The UK currency has derived strong defensive demand and climbed against 14 out of the 16 most actively traded currencies. A report from Rightmove Plc also showed that UK house prices rose to a record level in April, adding to optimism that the recovery is back on track. The Pound also benefited from the modest improvement in risk appetite, as the FTSE 100 Index rose 0.7% by midday in London, bouncing back from Friday's slump. There will still be expectations of sustained defensive demand for the Pound from the stresses in the Euro-zone, especially with Spanish fears escalating. In this context, there was some speculation that the Bank of England would voice concerns over a firmer Sterling trend. The Pound dipped lower this morning, as we enter a key week for UK markets. The CPI report for March is due for release today and the annual rate of inflation is expected to fall to 3.4% from 3.6% in February, the fifth consecutive monthly decline from the highs of 5.2% seen last September. However, the downtrend is expected to get a little slower as the impact of rising energy prices takes its toll. The Bank of England minutes will also be released this week and markets will be watching closely again to gauge the voting pattern. Two MPC members voted for further quantitative easing in March and it will be interesting to see if this has changed in light of the recent improvement in UK economic data. Also, the unemployment report and retail sales for March also feature. The Pound tested support in the region of 1.58 against the U.S Dollar before an improvement in risk appetite brought the rate back towards 1.59 last night. The UK currency could be vulnerable if there is a sustained deterioration in risk appetite, as a focus on banking would be likely to return. The Pound has slipped back towards 1.2115 versus the Euro this morning in anticipation of the inflation report. EUR/USD The Euro remained under pressure against the majors yesterday and dipped sharply to test support in the region of 1.30 with a brief dip below the level for the first time in two months. Confidence in Spain has continued to decline with a further increase in bond-yields to a four month high, while credit default swaps rose to record highs. There were further concerns over the impact of recession and fiscal tightening on the economy. There was additional speculation that the European Central Bank would either have to re-introduce the peripheral bond purchasing program or announce a further LTRO operation to sustain liquidity. In the U.S, the latest retail sales data was slightly stronger-than-expected with an increase of 0.8% for the headline and core numbers, which will maintain a broadly optimistic tone towards consumer spending. In contrast, there was a decline in the latest NAHB housing index, which will increase the focus on today's housing starts data.
If you need any further assistance, or require a live dealing quote - please do not hesitate to contact me on 01736 335250 or send an email to info@torfx.com Regards,
TorFX Any opinions expressed in this document are those of TorFX analysts. Any analysis and/or forecasts provided are aimed at helping clients understand market conditions and developing trends. Clients are wholly responsible for their own trading decisions. Unauthorised copying or re-wording of this content is prohibited. The copyright of this content is owned by Tor Currency Exchange Ltd. Any unauthorised copying or re-wording will constitute an infringement of copyright. | 
No comments:
Post a Comment