:: United States Dollar: The dollar remained firm yesterday, but traded in a wide range against a number of currencies. Pending home sales in the US came in better than expected, rising by 10.4% (versus an expected fall of 0.7%). Earlier, unemployment claims had come in slightly higher than expected, but the rise in home sale figures improved risk sentiment encouraging investors to move into riskier currencies such as the Euro. GBP/USD fell from highs around 1.5660 early in the day to a low of 1.5512. Positive figures pushed us higher to 1.5600 levels. We open this morning at 1.5640. Today we have non-farm payrolls and the headline unemployment rate out from the US at 13:30 and Services PMI figures at 09:30 in the UK.
– We expect a range today in the GBP/USD rate of 1.5550 to 1.5720
:: Euro: The Euro strengthened yesterday on the back of news flows from the ECB, who have intervened directly in the bond markets to support long term yields on peripheral Eurozone debt. The intervention was not classed as an increase in bond purchase amounts, rather it was an extension of the current bond buying scheme initiated by the ECB at the beginning of the year. Some analysts had discussed the potential of a “nuclear” option; the ECB buying up to 2 trillion Euros worth of bonds, but ECB officials have said no such plan is in the pipeline for now. EUR/USD rallied from a low of 1.3060 to a high of 1.3240, where we open this morning.
– We expect a range today in the GBP/EUR rate of 1.1740 to 1.1900
:: Aussie and Kiwi Dollars: With pressure off in the short term risk trades were back on yesterday benefitting the Aussie and the Kiwi. AUD/USD moved from a low of 0.9630 to a high of 0.9780 yesterday, pushing higher overnight to 0.9800. NZD/USD also pushed higher to levels around 0.7570 this morning, from a low yesterday of 0.7455. Australian figures overnight showed AIG services index dropping to 46.2 from 50.7 in the previous month. Despite this the Aussie remains bid.
– We expect a range today in the GBP/AUD rate of 1.5900 to 1.6100
– We expect a range today in the GBP/NZD rate of 2.0600 to 2.0800