– Expected range today in the GBP/USD rate of 1.6080 to 1.6240
– Expected range today in the GBP/EUR rate of 1.1800 to 1.1865
– Expected range today in the GBP/AUD rate of 1.5780 to 1.5990
– Expected range today in the GBP/NZD rate of 2.0780 to 2.0980
United States Dollar: GBP/USD traded to a high of 1.6270 yesterday following the release of more positive UK data. Services PMI beat expectations showing a sharp rebound from the contraction seen in December, the index spiking to 56.2. Cable remained well bid for the rest of the morning following this. The trade was then reversed come the afternoon session as ECB President Trichet appeared more dovish than expected in his accompanying press conference to the monetary policy decision. EUR/USD was sold which meant USD was in good demand accross the board. US data was also strong yesterday. Unemployment claims came in lower vs. forecast whilst nonfarm productivity, ISM non-manufacturing PMI and factory orders all beat expectations. GBP/USD fell back under the 1.6200 figure as a result and it opens the London session at 1.6160. It is likely to be a quiet morning as traders await US nonfarm payrolls due at 1:30 pm. Given the recent run of good US data, including ADP earlier in the week it might be another plus to the US economy.
Euro: EUR/USD has fallen from 1.3800 to 1.3630 in the last 24 hours. A dovish ECB President was the main cause. Trichet commented that the risks to the European economy were still tilted to the downside and that the recovery was expected to be dampened by balance sheet adjustment. As expected the central bank left interest rates on hold. Given these latest comments markets are pushing out their rate hike expectations too (2 rate hikes by August had been priced in pre Trichet comments). The strong USD data also weighed on EUR/USD. GBP/EUR is also higher as a result this morning and it has pushed up through the 1.1800 level. It opens this morning at 1.1850. EU Summit is due today.
Aussie and Kiwi Dollars: As Cyclone Yasi was downgraded to a category 1 yesterday AUD/USD resumed its push higher. The RBA monetary policy statement was also released overnight and was somewhat hawkish. It stuck to an inflation forecast of 2.75% by the end of 2011 despite the effects of the Queensland floods. The appreciation in AUD/USD came despite the strong US data released yesterday and AUD/USD now tests a break of the 1.0200 figure. It opens at 1.0190. NZD/USD meanwhile has settled lower following the weak employment data released earlier in the week. It has traded a fairly quiet range overnight in part also to most of the Asian market being away from their desks. GBP/AUD and GBP/NZD open at 1.5850 and 2.0880 respectively.