United States Dollar: Cable opens high this morning after UK data on Friday saw the Pound advance. Comments from BoE’s Sentance on Thursday initially gave the Pound a boost and it broke through 1.6100 versus the Greenback. Further rumours then surrounding an early interest rate hike took Sterling through 1.6200 Friday morning. Friday’s UK retail sales figures came in 1.3 % better than forecasted and 3.3 % better than previous figures as consumer spending rebounded in January. Comments from Mervyn King later on in the session gave a better indication on interest rate increases through this year. It seems that we are to expect a 25 bps rate increase within the next four months and interest rates should be at 1 % before the end of the year. This sees cables early break through 1.6200 on Friday maintain with a high for the currency pair seen at 1.6260. Slightly off these highs for this morning however and we open at 1.6223. There is no data due today in the UK today and its a US Bank holiday also, so a quite day ahead – possibly.
– Expected range today in the GBP/USD: rate of 1.6150 to 1.6280
– Expected range today in the GBP/EUR: rate of 1.1790 to 1.1960
– Expected range today in the GBP/AUD: rate of 1.5970 to 1.6080
– Expected range today in the GBP/NZD: rate of 2.1110 to 2.1350
Euro: The Euro has maintained and advanced on its recent gains against the US dollar. News from China that they raised required reserve ratio 50 bps early on Friday saw the Euro fall against the US dollar. This took the currency pair down to the session low of 1.3550, but as we have being seeing recently we saw buying on the dips. Sterling gained again the Euro on the back of this, seeing a session high of 1.1960 achieved. The turnaround for the Euro was seen during the US session Friday after newly hawkish comments from ECBs Bini-Smaghi. His comments stating that the bank may need to raise interest rates as global inflation pressures mount saw the Euro jump above 1.3700 versus the Greenback and Sterling fell back down to 1.1850. We have seen little change in GBP/EUR with the currency pair opening at 1.1857 this morning. EUR/USD has fallen around 30 pips from its highs during the Asian session opening at 1.3684.
Aussie and Kiwi Dollars: Middle Eastern turmoil saw investors look for another safe haven currency other than the Greenback Friday. This meant that the Aussie and Kiwi, which had continued their recent rises against the Greenback, took a small dip against the US dollar. Mild profit taking seen at the currency pair’s highs as risk aversion crept back into the markets. AUD/USD opens at 1.0125 and NZD/USD is currently 0.7646. Despite the positive data in the UK Friday, Sterling saw fairly flat trading versus the Aussie. The currency traded within 70 pips. It fell against the Kiwi, seeing a 110 pip fall from the session high of 1.1330 Friday. GBP/AUD opens mid of its range Friday at 1.6025. GBP/NZD opens at the lows at 2.1220 currently.