GBP Retreats From 7 Month High Price

Sterling lost ground against a number of its peers on Monday as investors engaged in a spot of profit-taking and a dearth of UK data gave the Pound little opportunity to move upward. The GBP/USD currency pair moved away from its recent seven-month high and GBP/EUR dipped back below 1.40 amid hopes that Greece is close to reaching an agreement with its creditors. However, the Pound managed to move back above 1.40 on Tuesday in spite of French Services and Manufacturing PMI printing above expected levels. Today’s CBI reports could cause a little Pound movement.

Euro

News that the latest reform proposals submitted by Greece to its creditors were found to be more acceptable than previous drafts gave the Euro a bit of a boost at the beginning of the week. However, later reports that the Greek PM has been given just 48 hours to finalise an agreement put the common currency under pressure and it softened against rivals like the Pound and US Dollar in spite of the publication of positive ecostats for the Eurozone’s second largest economy.

US Dollar

Risk aversion lent the US Dollar support on Monday, as did the US Exiting Home Sales report. Sales were believed to have increased by 4.8% on a month-on-month basis in May, but they actually climbed by 5.1%. ‘Greenback’ gains were limited however as the Chicago Fed Net Activity Index disappointed expectations. If today’s US Durable Goods Orders figure shows the -1.0% decline anticipated the US Dollar could edge lower in the hours ahead.

Australian Dollar

The Australian Dollar posted a modest gain against the Pound during the local session in spite of both the Westpac Leading Index and the Australian House Price Index printing poorly. ‘Aussie’ support came in the form of China’s HSBC Manufacturing PMI, which advanced from 49.2 to 49.6. The measure had only been expected to edge to 49.4.

New Zealand Dollar

The New Zealand Dollar put on a fairly mixed performance on Tuesday, gaining on the Pound and Euro but falling against the US Dollar and Australian Dollar following the publication of China’s Manufacturing PMI. Ecostats for New Zealand are in short supply until Thursday when the nation is set to publish its trade balance figures.

Canadian Dollar

Yesterday morning saw the GBP/CAD exchange rate soften by more than a cent as traders took advantage of the pairing’s recent four-month high. With no Canadian data scheduled for release this week ‘Loonie’ volatility will be the result of global economic developments and commodity price shifts.

GBP Slides As Dollar Hits a New 12 Year High vs Yen

The Pound Sterling fell against the Euro to trade in the region of 1.38 as it came under pressure from Monday’s softer-than-expected UK Manufacturing PMI data and optimism that a deal will be reached between Greece and its creditors. Against the US Dollar, Sterling was trading close to a three-week low. The currency rate could make gains for those looking for money transfers if the upcoming UK Construction PMI comes in positively.

US Dollar

The US Dollar advanced to a new 12-and-a-half year high against the Japanese Yen and firmed against other major peers following the release of upbeat US manufacturing activity and construction spending data, which bolstered expectations for higher interest rates. The ISM index of manufacturing activity came in at 52.8, up from 51.5 in April and ahead of forecasts for a print of 52.0.

The Euro

The Euro advanced against the Pound and other major peers as speculation increased that European creditors are close to offering a new deal to Greece. German chancellor Angela Merkel held an unscheduled emergency meeting to discuss the situation. The Euro could make further gains if data out of Germany and inflation data out of the Eurozone comes in positively.

Australian Dollar

The ‘Aussie’ rallied by more than 1% against both the US Dollar and Pound Sterling after the Reserve Bank of Australia left interest rates on hold but hinted that a rate cut could occur later in the year. RBA governor Glenn Stevens said in his statement that the Dollar had further to fall, yet avoided reinstating an explicit bias towards lower interest rates given the full impact of last month’s quarter of a percentage point cut was yet to be felt in the economy.

New Zealand Dollar

The New Zealand Dollar firmed against a number of peers as investors took profits on the US Dollar following the release of Monday’s positive ISM data. With no domestic market moving data due out of New Zealand until next week, the ‘Kiwi’ is set to be influenced by external factors.

Canadian Dollar

The ‘Loonie’ tumbled to a six-week low against the ‘Greenback’ on Monday but managed to regain ground today as investors took profits on the US currency. The Canadian Dollar did find some support from oil prices, which stabilised due to firm demand.

Euro Continues to Slide Despite Recent Bounce

The euro continues to sink against the dollar to 1.226 dollar against 1,228 dollars on Friday night, and even recorded a lowest in more than two years to 1,225 dollar, continuing the subsequent stall the publication of figures from the employment in the United States.

For the record, the euro-dollar fell Friday in announcing the creation of 321,000 non-farm jobs in the United States in November, while economists had expected that approximately 225,000 and an unemployment rate stable at 5.8%.

In light of this report, Natixis said he expected that “wage growth moderate returns in the medium term ‘, so that’ the Fed normalizes its interest rate policy from the mid 2015 ‘.

‘Many analysts expect the Fed to be stronger at the end of its meeting next week, which would enhance the prospect of mid-2015 for a first rate hike’ adds-on that Monday at IG.

The single currency suffers also from lower by Standard & Poor’s lowered its rating of Italy from ‘BBB’ to ‘BBB-‘, arguing that the weakness of the country’s economic performance undermining its ability to cope with its debt.

More bad news from the eurozone, German industrial production rose by only 0.2% in October, a rate two times less than that expected by the consensus, marking a slowdown from the previous month (+ 1.1%).

Always compared to Friday, the euro and the dollar will depreciate against the Japanese currency by 0.7% to 148.5 yen and 0.5% to 121 yen, while the return from Japan into recession was confirmed with a decline of 0.5% of GDP in the third quarter.

Further Pressure on the Dollar In Spite of Strong Data

Despite the strong economic data in the United States, the US dollar came under pressure on Friday afternoon. Is bearish on the greenback, which has allowed the EURUSD to finish the week above $ 1.25, would be explained by the cut positions by speculators in the foreign exchange market that a change management due to a deterioration in the US economy.

At the beginning of this new week, traders will scrutinize the various statistical euro eurozone this morning, namely the trade figures for the currency bloc. While the evolution of European trade balance will influence the exchange rate of the euro over the medium / long term contracts rather should focus on the events this afternoon.

This is especially the testimony of the president of the European Central Bank (ECB), Mario Draghi in Brussels to 15h CET that will attract the attention of traders today. Draghi will make his quarterly hearing before the European Parliament Committee on Economic and Monetary Affairs of the European Parliament.

The next US statistics will also follow. At 14:30, the Empire State manufacturing index for the New York area will be published. This statistic is expected to surge to 12.0 in November against 6.17 in the previous month. The industrial production figures at 15.15 should also impact the price of the EURUSD as they are closely watched by the Federal Reserve.

Dollar Falls Back as GBP Gains Strength

While the EUR USD remains stable at around 1,247, sterling collapsed against the other two major Western currencies: compared to the previous evening, the Euro tooks 0.5% to 0,788 and the dollar stood at 0,632.

The British currency is under pressure after the publication of the Inflation Report of the Bank of England, compared with forecasts that tend to move the prospect of raising its key rates next year.

Due to the weakness of the European economy, the central bank has indeed lowered its inflation forecast for the UK, 1.9% to 1.2% for 2014 and from 1.7% to 1.4 % by 2015, and stated that this rate may fall below 1% within six months.

Figures for industrial production in the euro zone exceeded expectations with an increase of 0.6% in September against the forecast 0.2%, but it is not sufficient to allow the euro to appreciate beyond $ 1.25.

According to analysts, EUR USD may therefore continue to trade below 1.25 ‘pending a more important as inflation in Germany Thursday or Gross Domestic Product (GDP) of the region fundamental catalyst euro Friday.

After reaching a new low of seven years at $ 116 Tuesday, the Japanese currency rises against other major currencies: compared to the previous evening, the euro-yen unscrewed 0.8% to 143.5 while the dollar-yen declined by 0.7% to 115.

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