Raphael Sonabend, FX Analyst
A fairly quiet day in terms of data yesterday was eclipsed by strong Sterling gains in the morning. These were soon regained by counterparts and commodity currencies fared particularly well towards the end of the day. US figures yesterday were in line with predictions as unemployment claims barely moved and Philly Fed manufacturing index saw a decrease. Today will focus on Canadian data with CPI and retail sales figures at 12:30. Another quiet day is expected in the markets.
GBP/EUR: Currently trading at 1.3799
- The pound climbed to highs of 1.3976 against the euro yesterday before a dip at midday took the pairing back to 1.383 levels. Limited data from the EU economic summit saw no movement in this pair, possibly more reaction will be seen during the second day of meetings today.
- Another quiet day will see trading based on speculation surrounding the EU economic summit. Euro gains posted this morning could be extended throughout the day.
GBP/USD: Currently trading at 1.4744
- After a significant drop against the pound two nights ago, the dollar regained most lost ground yesterday throughout the day. Unemployment claims saw an increase from 290K to 291K whilst the Philly Fed manufacturing index unsurprisingly fell from 5.2 to 5.0. Weak results failed to affect the once-again strengthening dollar.
- With no data of note out today, focus will be on Fed speakers Lockhart and Evans this afternoon. With both speaking on monetary policy, perhaps we’ll gain some insight into these two individuals’ views on the next rate hike.
EUR/USD: Currently trading at 1.0681
- The dollar gained slightly in yesterday morning’s session before range-bound trading was seen throughout the rest of the day. A tight range between 1.07 and 1.06 contained this pair as US unemployment claims saw little change and the Philly Fed manufacturing index fell as expected.
- Today’s focus will be on speeches from Fed doves Lockhart and Evans. Due to speak on their views on monetary policy, potential for further USD weakness if they are as dovish as usual.
GBP/AUD: Currently trading at 1.9210
- Yesterday saw the pound strengthen throughout the first part of the day, peaking at 1.946 before taking a nose dive dropping to 1.926 by the end of the day. Governor Stevens’ upbeat comments earlier today to the American chamber of commerce highlighted the increasing momentum of the US economy and its support for the Aussie. These comments have consolidated the steady AUD strength this morning.
- With no influential data scheduled for release today, we forecast little volatility with traders looking towards UK and US CPI figures on Tuesday.
GBP/NZD: Currently trading at 1.9808
- Similar to other commodity pairings, this pair saw Sterling gains in the morning before the Kiwi regained lost ground and pushed the rate back in its favour, ending the day below 1.98. Solid results from usually low-impact data helped solidify Kiwi gains.
- A quiet day ahead should allow recent trends to continue and the Kiwi could continue its gains against the pound.
GBP/CAD: Currently trading at 1.8696
- The pound surged yesterday morning, before a mid-day reversal gave the Loonie strong momentum closing out the day ahead.
- The focus for today’s session will be the Core CPI and Core Retail sales data from Canada. Forecasters expect inflation to slow as oil prices still weigh heavily, retails sales is predicted to fall, which could push the Loonie lower against the pound.
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