UKForex: US Dollar gains against the Euro and Sterling [14/02/2011]

UKForex: US Dollar gains against the Euro and Sterling [14/02/2011]

– Expected range today in the GBP/USD: rate of 1.5960 to 1.6090
– Expected range today in the GBP/EUR: rate of 1.1800 to 1.1930
– Expected range today in the GBP/AUD: rate of 1.5870 to 1.6095
– Expected range today in the GBP/NZD: rate of 2.0950 to 2.1230

United States Dollar: A busy Friday saw positive data for both the GBP and USD. After little surprise coming from the BoE interest rate announcement and asset purchasing scheme Thursday, cable remained above 1.6000 and traded within 110 pips. Friday however saw Sterling fall below the big figure of 1.6000, despite PPI data coming in stronger than expected. This was due to the breach of key resistance in the DXY (dollar index). The resistance figure that was broken was 78.35 and it rallied to a high of 78.69. The Greenback made gains across the board on the back of this, but saw little in the way of gains against the commodity currencies. Other data saw the US trade deficit widen to $40.6 bln in December and the Philly Fed survey of professional forecasters predicting a brighter growth prospect for the US. Sterling has erased Friday losses versus the Greenback and is back above the 1.6000 figure this morning. UK weekend press releases surrounding inflation and interest rates have helped the GBP, with support also coming in from China buying cable towards the 1.6000 level. GBP/USD opens this morning at 1.6053. 

Euro: Similar to the USD gains against the Pound on Friday, it also saw reasonable gains against the Euro. Early during the European session on Friday saw German CPI and WPI data come in better than expected, but this did little in the way of preventing the US Dollar’s gains on the back of the DXY (as mentioned above). The EUR fell below 1.3500 versus the Greenback, albeit briefly. EUR/USD opens this morning however 20 pips below 1.3500. Weekend speculation surrounding the Irish debt bail-out is the reason for this and occurs despite risk appetite improving after Egyptian president Mubarak resigned on Friday. Sterling remained within 1.1800 against the single currency Friday. This is mainly based on all that has already been mentioned. We currently see Sterling pushing towards 1.1900 this morning, but opens just short of this figure at 1.1880.

Aussie and Kiwi Dollars: The Aussie has advanced higher against the Greenback. The Kiwi has remained firm. The commodity currencies were the ones that held off the US Dollars advances Friday. The AUD has pushed higher against the US Dollar overnight as risk improved and as rumours surround a low inflation figure tomorrow in China. This is a turn around from the Aussie falling below parity late last week as comments from RBA Governor Glenn Stevens suggested interest rates would remain stationary for most of this year. AUD/USD begins today session at 1.0033 and NZD/USD is currently 0.7573. On this data the Pound has lost against the AUD and remained reasonably firm against the Kiwi. The currency pairings open at 1.5960 and 2.1142 respectively. 



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