Moderate UK data fails to ignite spark in GBP/USD

Moderate UK data fails to ignite spark in GBP/USD

Sinduja Venkat

Good morning and welcome to today’s foreign exchange market commentary on 11th of June. 

Here are MyCurrencyTransfer.com’s top 5 currency highlights:

  • Moderate UK data fails to ignite spark in GBP/USD
  • German court begins review of OMT program, Merkel offers support
  • S&P upgrades US sovereign debt rating to “stable”
  • BoJ meet debrief indicates Japan to maintain monetary policy stance
  • Strong domestic data predicts rally of Aussie bonds

CURRENCY RATES OVERVIEW 

GBP/EURO – 1.1712
GBP/USD – 1.5545
GBP/CHF – 1.4413
GBP/CAD – 1.5917
GBP/AUD – 1.6639
GBP/ZAR – 15.9742
GBP/JPY – 150.6447
GBP/HKD – 12.0698
GBP/NZD – 2.0007
GBP/SEK – 10.2423

Mid-market rates as of 2013-06-11 12:17 UTC

Key releases in the next 24 hours that may affect currency date:

Australia: No Data
Europe: EUR German Court Hearing on ESM
United Kingdom:  GBP NIESR Gross Domestic Product Estimate (MAY)
New Zealand: NZD NZ Card Spending – Retail (MAY), NZD NZ Card Spending (MoM) (MAY)
United States of America: No Data
China: No Data
Canada: No Data
Japan: JPY Machine Orders (YoY) (APR)

Moderate UK data fails to ignite spark in GBP/USD

UK Industrial Production dipped by 0.6% in April as compared to the previous year and this succeeds a 1.4% drop in March, National Statistics stated earlier today. The expected figure was a 0.7% dip. Also on a year on year basis UK Manufacturing Production figures dipped by 0.5% in April, but performed better as compared to the 1.4% drop in March. The reasonable data has however led to GBP/USD decline. The pair is now floating within the range of 1.5540 and 1.5560.

German court begins review of OMT program, Merkel offers support

EUR/USD pair came under threat this morning as the German top court begins to review the ECB’s Outright Monetary Transactions program. The ECB’s as yet under analysed OMT initiative to support struggling EU countries’ bond prices was seen as the reason for Euro rally this year.  German Chancellor Merkel said today that her government will argue in favor of the OMT program. The court is also set to review the ESM permanent bailout fund for the Euro-zone.

S&P upgrades US sovereign debt rating to “stable”

Standard & Poor’s ratings agency raised its outlook for US economy from its previous rating of ‘negative’ to ‘stable’ yesterday indicating that the US economy is less likely to incur any further credit downgrade in the near term. Last year S&P had lowered its US sovereign credit rating from AAA to AA+. USD had strengthened against its peers following S&P’s debt downgrade last year. Yesterday’s announcement  from S&P however did not markedly improve USD’s value although the Greenback made some initial gains against its peers.

BoJ meet debrief indicates Japan to maintain monetary policy stance

Tuesday’s BoJ’s monetary policy meet for the month of June. The outcome of the meeting witnessed certain key decisions including maintaining its original stance on increasing the monetary base by JPY 60-70 trillion annually and keeping other policy on hold. Governor Kuroda further stated that the Japanese economy was improving, although uncertainty remained high.

Strong domestic data predicts rally of Aussie bonds

The AUD/USD tumbled further earlier today with several causes pointing to this effect. This includes China which is concerned about slowing economy, while reasonably strong Australian data continue to arise. Domestic data from the country indicate that Aussie bonds will appreciate in value.

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