Raphael Sonabend, FX Analyst
As was largely expected, the results of the Greek elections were already priced into the markets and the immediate reaction seen in the Asian markets was quickly reversed. In fact, the euro managed to gain against the majority of its counterparts in yesterday’s session as German confidence figures increased. UK GDP at 9:30 this morning is forecast to fall from 0.7% to 0.6% whilst BBA mortgage approvals is predicted to fall by 0.1K. US durable goods orders are due at 13:30 and new home sales data is due at 15:00. After strong housing data was released last week, it would not be surprising if new home sales surpasses expectations.
GBP/EUR: Currently trading at 1.3338
- On the back of strong German Ifo Business Climate results, the euro strengthened against the pound, gaining just over a cent yesterday morning. Optimism has been boosted in the light of falling oil prices and in anticipation of the ECB’s QE stimulus plan. Increasing optimism may be seen in all Eurozone countries as the ECB’s QE programme is due to start soon.
- UK figures this morning are forecast to drop off slightly with preliminary quarterly GDP predicted to drop off from 0.7% to 0.6% and BBA mortgage approvals (which were meant to be released yesterday) predicted to fall from 36.7K to 36.6K. With UK data forecast to be poor, we could see the euro attempt another day of gains.
GBP/USD: Currently trading at 1.5105
- As UK mortgage data was delayed by 24 hours, neither country saw any figures released yesterday, which proved beneficial for the pound. After the results of the Greek election were largely priced into the markets, EUR/USD rose in the euro’s favour and the dollar fell against the euro and pound.
- The pound’s gains are unlikely to continue today as data from the UK is predicted to fall whilst US data is forecast to increase. US durable goods orders this afternoon are forecast to rise from -0.9% to 0.6% and the actual result could exceed forecasts as falling oil prices are likely to boost transportation orders.
EUR/USD: Currently trading at 1.1326
- Like FX dalles, constricted by 1.114 and 1.130, this pair saw a range-bound day of trading, with the euro making some gains and coming out on top. As the outcome of the Greek elections were more or less priced into the markets, the actions of the ECB will be the main factor to weigh in on the pairing in the medium-long term.
- With no data out of the Eurozone, announcements out of the US today should provide the USD with the potential to strengthen against the euro. Durable goods orders and new home sales are forecast to increase, while a consumer confidence survey released later this afternoon is expected to yield positive results. We therefore expect to see some price action on the dollar upside.
GBP/AUD: Currently trading at 1.8994
- A relatively quiet day yesterday as the pound and Aussie struggled for strength, with the rate closing only slightly above opening. This morning has seen Aussie gains as the National Australia Bank business confidence survey increased from 1.0 to 2.0. Looking at this result in slightly more detail highlights the true weakness behind its mask: business conditions fell from +5 to +4 and business confidence in fact only increased by 0.1, which saw the figure rounded up. AUD gains may therefore be limited.
- With UK data forecast to drop off slightly and US figures predicted to improve, today is likely to bring another GBP/AUD struggle to be on top. Similar trends to yesterday are likely to prevail and range-bound trading could continue.
GBP/NZD: Currently trading at 2.0283
- A poor day for the Kiwi yesterday as the pound gained around two cent over the course of the day. This may have been a result of the USD being over-bought after an immediate EUR/USD sell-off that occurred in the Asian markets after Syriza won the Greek elections.
- With no NZ data out today our focus will instead be on UK and US data. UK GDP is forecast to drop off slightly this morning and US data is predicted to improve this afternoon. The Kiwi may therefore recover some lost ground in today’s session.
GBP/CAD: Currently trading at 1.8804
- The Loonie fell against the pound yesterday as oil prices continued to slide. Brent LCOC1 fell 1.3% as traders discounted comments from OPEC officials who said that oil may have hit a floor and will soon rebound.
- Focus today will be on UK data in the morning and US data in the afternoon. As UK data is forecast to drop off and US figures are predicted to increase, the Loonie may find opportunities to recover some lost ground against the pound.
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