United States Dollar: Sterling has seen a u-turn in its movement against the US Dollar in the past 24 hours. Sterling had been trying to push through 1.6200 earlier this week as Mervyn King’s inflation letter sparked a market view that interest rates are likely to be hiked near term. Mervyn then dashed these views during his press conference the following day and saw the Pound fell as low as 1.6000 against the Greenback. The Pound then started to advance once again from these lows on the back of comments from BoEs Sentance Thursday. Sentance stated that rates need to rise faster and more than market expect to bring CPI back to target. He also stated that the benefit of higher rates would be a stronger Sterling. This saw cable rise back above 1.6100. A Rumour circulating this morning states that at a dinner, Sentance mentioned that there were more than 2 votes for a hike in their last meeting. This has seen the Pound break through 1.6200. A mix bag of data during the US session yesterday, but the two pieces of data worth mentioning is jobless claims rose back above 400k and the Philly Fed soared to 35.9 against a forecast figure of 20.8. GBP/USD opens today at 1.6190.
– Expected range today in the GBP/USD: rate of 1.6010 to 1.6280
– Expected range today in the GBP/EUR: rate of 1.1810 to 1.1990
– Expected range today in the GBP/AUD: rate of 1.5890 to 1.6180
– Expected range today in the GBP/NZD: rate of 2.1120 to 2.1400
Euro: The single currency thwarted off bad data yesterday as support came in from central banks. Despite such data as emergency overnight borrowing causing some market confusion as the ECB jumped to 15 bln (highest level since June 2009), a Reuters article stating Portugal will need a bailout by April and Moodys downgrading the subordinated debt of German banks, the central banks bought EUR/USD at every dip. EUR/USD opens this morning at 1.3587. Eyes will now be turning to the G-20 meeting in Paris over the weekend. Sterling has succeeded where the US Dollar failed in its gains against the single currency. The Pound has broken through 1.1900 and currently sits at 1.1911. Not a lot more to add that hasnt already been mentioned, but today does see King speak once again. We all know what happened last time.
Aussie and Kiwi Dollars: Another quiet Asian session last night, but it was the US session that saw the Aussie and Kiwi advance against the US Dollar. Rumours still circulating that the buying is linked to insurance payments tied to the string of natural disasters in Australia recently. This sees AUD/USD open near the peaks of the US session yesterday at 1.0718. The same can be said for NZD/USD as the currency pair opens at 0.7615. Sterling has also fallen to the advances of the Aussie and Kiwi. This is again for the same reasons as just mentioned. GBP/AUD opens today at 1.5991 and GBP/NZD is currently at 2.1236.