GBP reaches new low against dollar

GBP reaches new low against dollar

CURRENCY RATES OVERVIEW

GBP/EURO – 1.1533
GBP/US$ – 1.5158
GBP/CHF – 1.4092
GBP/CAN$ – 1.5502
GBP/AUS$ – 1.4754
GBP/ZAR – 13.4112
GBP/JPY – 140.04
GBP/HKD – 11.7512
GBP/NZD – 1.8232
GBP/SEK – 9.7524

Good morning and welcome to today’s foreign exchange market commentary on Thursday, the 28th of February.

EUR: The Italian comedian-turned-politician Beppe Grillo’s rejection to join hands with the country’s Democratic Party to form a ruling coalition clearly had little effect on investors as Italy managed to meet its target in yesterday’s bond auction, albeit at a higher yield. The Italian Treasury achieved the higher range of its targets and sold a total of EUR 6.5 billion in public debt, more than the EUR 4.5-5 billion expected. The shared-currency perked up further against the dollar after German consumer confidence forecast for March came in better-than-expected. Figures for Gfk showed confidence rose to 5.9 compared to 5.8 a month before. Also Eurozone’s economic confidence index for February rose to 91.1 from 89.5 in the month before. The euro bought $1.3136 against $1.3066 on Tuesday and traded at 121.10 yen per euro compared with 120.04 in the previous session. The economic data calendar is light on the ground today with only the CPI data due for release in the morning and any reading below or above 2.0 percent could trigger volatilities.

USD: The US dollar had a mixed day yesterday with the greenback struggling in the morning but tracing back some of the early losses after both existing home sales data and durable goods orders – excluding transportation, came in much stronger than anticipated. In his second day of testimony to the US Congress, Fed chief Ben Bernanke supported the central bank’s loose monetary policy, signaling the monthly bond purchase program will continue in the foreseeable future. Cable traded relatively flat yesterday though the pound have shed 8.6 percent since its January high year-to-date. The GBP/USD pair reached a new low of 1.5080 yesterday morning after the second estimate confirmed UK GDP shrank by 0.3 percent in the final quarter of 2012. There’s no UK data due for release today while the preliminary quarterly GDP data is expected at lunchtime across the Atlantic.

Have a great day!

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