UKForex: Moody’s put Portugals A1 rating on review for downgrade [21/12/2010]

UKForex: Moody’s put Portugals A1 rating on review for downgrade [21/12/2010]

United States Dollar: GBP/USD has traded a narrow range over the last 24 hours. It slipped below 1.5500 again to a low of 1.5480 yesterday and found yet more buyers lined up. Concerns over the state of European peripheral debt and the risk averse nature of financial markets currently means that GBP/USD continues to trade on the back foot. The calendar has been thin too; the only set of economic data worth noting from either the UK or US has been GfK consumer confidence and even that was unchanged in December. Not much changes today either, only UK public sector new borrowing data is due. GBP/USD opens the day at 1.5560.

– We expect a range today in the GBP/USD rate of 1.5480 to 1.5590

Euro: EUR/USD remains lowly this morning, although it has been lower over the last 24 hours. It stooped to 1.3100 yesterday as the ratings agencies got busy. They are still busy in fact; Moody’s has recently put Portugals A1 rating on review for a possible downgrade. All other Euro news seems to be negative too; yesterday morning the Greek PM said that he was not convinced that last weeks EU Summit decisions were enough to stabilise the Euro zone. An article in todays Telegraph also points out recent comments made by Andrew Bosomworth, head of Pimcos portfolio management in Europe. He has said that current policies in Europe “are untenable in the absence of fiscal union and will lead to the break-up of the euro”. Meanwhile and as pointed out in the same article the OECD has warned that Spain must cut harder and deeper to rein in its finances. The bad news and bad feeling continues to build up and it leads many to believe that EUR/USD may eventually break below 1.3000 pre xmas. It opens this morning at 1.3140. GBP/EUR is ever so slightly higher compared to this time yesterday and trades at 1.1830 this morning.

– We expect a range today in the GBP/EUR rate of 1.1780 to 1.1840

Aussie and Kiwi Dollars: AUD/USD and NZD/USD both open higher this morning at .9950 and .7460 respectively. Local share indices received a boost overnight as it looked more and more like big Australian miners had won a long standing battle with the PM. A tax review panel has recommended that the government pick up the future state royalty payments under the reform package. Asian stocks have also risen overnight, buoyed by higher commodity prices and easing tensions between North and South Korea. This has also helped to support both high yielding currencies. In other news RBA monetary policy minutes delivered few surprises. It focused predominantly on the situation in Europe. Both GBP/AUD and GBP/NZD open lower this morning and trade at 1.5600 and 2.0830.

– We expect a range today in the GBP/AUD rate of 1.5520 to 1.5680

– We expect a range today in the GBP/NZD rate of 2.0710 to 2.0920


Leave a reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>