Sterling strengthens against US dollar
Sterling had a mixed day yesterday, weakening off against the commodity backed currencies, but strengthening against the safe havens such as the US dollar as risk appetite returned.
Sterling had a mixed day yesterday, weakening off against the commodity backed currencies, but strengthening against the safe havens such as the US dollar as risk appetite returned.
Currency rates - June 7
EURO/GBP - 1.2302
US$/GBP - 1.5452
CHF/GBP - 1.4786
CAN$/GBP - 1.5898
AUS$/GBP - 1.5542
ZAR/GBP - 12.8178
JPY/GBP - 122.62
HKD/GBP - 11.9874
NZD/GBP - 2.0079
SEK/GBP - 11.0984
AED/GBP - 5.676
US$/EURO - 1.2541
INR/GBP - 85.24
The Construction Purchasing Managers' Index (PMI) came in as expected yesterday. Today we have the Services PMI figures released and the June Monetary Policy Meeting of the Bank of England. The Bank of England's interest rate and asset purchase facility decision will be the main news on the agenda, whilst both are expected to be kept on hold but this is far from being certain given the state of the UK economy and the need for growth in the UK economy. Any variation from these values could cause a lot of volatility in the market.
The euro had a mixed day yesterday. It did strengthen against the US dollar to break back through the 1.25 level as the ECB kept rates on hold at 1.00%. This was widely as expected. But, at the press conference that followed the President of the ECB said that the prospect of cutting interest rates had been discussed at the central bank meeting. The main items of interest today will be the Spanish (and to a lesser extent the French) bench mark 10 year bond auction who's yields are already dangerously close to the 7% mark, which is viewed as the level at which government debt repayments become unsustainable. With the Spanish woes already in the global economic spotlight, the results of the auction could cause high volatility.
The US dollar was fairly weak yesterday as investors sought riskier investments following the positive data coming from Australia. The Beige Book release provided no shocks, indicating that the economy was expanding at a moderate pace.
Elsewhere, the Australian dollar performed well yesterday as quarterly GDP data released yesterday was much better than expected showing growth of 1.3% when only 0.5% was expected. Employment data out today will give further indication of the state of the Australian economy. Other data released today includes Canadian Ivey PMI and from Switzerland we see the release of foreign currency reserve figures and monthly inflation data. Call in now for the latest news and a live quote.
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