UK posts growth in GDP, GBP rallies

UK posts growth in GDP, GBP rallies

Sinduja Venkat

Good morning and welcome to today’s foreign exchange market commentary on 24th of May. 

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

  • GBP rallies once again on GDP push
  • ECB has made sound decisions thus far says Draghi
  • USD dips on wave of risk aversion
  • Yen sales up once again as deflation concerns dampen
  • More bad news for AUD as Ford pulls out local manufacturing

CURRENCY RATES OVERVIEW 

GBP/EURO – 1.1639
GBP/USD – 1.5119
GBP/CHF – 1.4592
GBP/CAD – 1.5633
GBP/AUD – 1.5624
GBP/ZAR – 14.4298
GBP/JPY – 154.1064
GBP/HKD – 11.7379
GBP/NZD – 1.8691
GBP/SEK – 10.0428

Mid-market rates as of 2013-05-24 08:40 UTC

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

Australia: No Data
Europe: EUR German Gross Domestic Product s.a. (QoQ) (1Q F), EUR German Gross Domestic Product w.d.a. (YoY) (1Q F), EUR German Gross Domestic Product n.s.a. (YoY) (1Q F), EUR German IFO – Business Climate (MAY), EUR German IFO – Current Assessment (MAY), EUR German IFO – Expectations (MAY)
United Kingdom:  GBP BBA Loans for House Purchase (APR)
New Zealand: No Data
United States of America: USD Durable Goods Orders (APR), USD Durables Ex Transportation (APR)
China: No Data
Canada: No Data
Japan: No Data

GBP rallies once again on GDP push

GBP received some aggressive bids towards the end of yesterday’s session pushing up its value to 1.5107 against the USD following the release of UK GDP figures coming in on par with expectations. Output increased by 0.3% in Q1 2013 after dipping by 0.3% the previous quarter. GDP increased by 0.6% compared to the previous year. The main contribution to this growth story has been the percent change in inventories, an increase of 0.4% as well as overall increase in household final consumption expenditure.

ECB has made sound decisions thus far says Draghi

On his Thursday’s speech in London Draghi said that the European Central Bank’s decisions at this time were all directed at ensuring a sound future and longevity of the Euro currency.

The ECB head further mentioned that several policy measures that were being implemented by the bank helped to alleviate the critical situation that could have otherwise impacted the financial markets to a considerable extent. The ECB he said prevented rise in interest rates which would have led to the collapse of several Eurozone economies and also eliminated the risk of a currency collapse.

USD dips on wave of risk aversion

USD dipped against all major peers over last night’s trading session as a wave of risk aversion threatened the recent bullish mood in US markets. However, American trading session open witnessed US stocks advancing from pre-open negative indicators. The US index consistently declined on Thursday, dipping to the 83.75/80 region after soaring to overnight highs of 84.60.

Yen sales up once again as deflation concerns dampen

Yen is being sold in volumes once again as USD/JPY rises once again over the 102 level after tumbling to below 101 yen during yesterday’s volatile European session. Japan’s government as well as BOJ Governor Kuroda tried to alleviate concerns by reinforcing that Japanese Government Bonds and stocks are on close watch, and the important goal for the policy makers at this time is to combat deflation.

More bad news for AUD as Ford pulls out local manufacturing

As news released that auto maker Ford is planning to pull out of local manufacturing the Aussie dollar which was trading in the 0.9680 region sank to the 0.9650 region. It had made some advances earlier on in anticipation of HSBC Chinese PMI before the data release indicated a contraction. Following this Aussie dipped back into the 0.9590 region against the greenback.

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