|
Thursday 26th August 2010
Good Morning,
EUR
The Euro attempted a technical recovery in European trading yesterday with a challenge on resistance levels against the dollar. The currency looked to correct higher after recent sharp losses and also drew support from a stronger than expected reading for the German IFO index. The recent Euro-zone data has continued to suggest resilience, especially in the key German economy and this is providing some Euro support. Structural fears are also still a very important factor and there are growing fears over a fresh round of debt default fears, especially after European Central Bank suggestions that extra liquidity will be needed.
USD
The US economic data maintained the recent very weak run with new home sales falling by 12.4percent for July to a record low annualised rate. Following the very weak existing home sales data, a disappointing reading was likely. There will, however, be greater concern over the durable goods data which recorded a much weaker than expected 0.3percent gain for July while core orders fell 3.8percent. The industrial sector has been able to provide firm support during 2010 and there will be fears that this sector is now looking vulnerable. In particular, there will be concern over a sharp decline in core capital goods spending. Although the data will increase fears over the global economy and maintain a defensive attitude towards risk appetite which will help underpin the dollar, there will also be continuing fears over the US economy and pressure for a further expansion of quantitative easing.
GBP
Sterling found further support against the dollar over the past 24 hours and advanced in Asian trading yesterday with Sterling also underpinned against the Euro. There have been reports of central bank interest in Sterling at lower levels which has helped to toughen support levels. There have been no major domestic economic releases to help guide markets and it is still the case that underlying confidence in the UK economy is liable to weaken. A key factor for Sterling is that there will be very little confidence in the US and Euro-zone outlook. In this environment, there should be protection for the UK currency despite the persistent domestic fears. Sterling will be much more vulnerable to selling pressure if there is any evidence of renewed stresses in the UK banking sector.
Morning Market Rates: (Please note: These are indication prices only, they are not offer rates)
GBP/USD: 1.5504
GBP/EUR: 1.2170
GBP/AUD: 1.7465
GBP/CHF: 1.5960
GBP/ZAR: 11.3520
GBP/JPY: 131.20
USD/JPY: 84.10
USD/ZAR: 7.2920
EUR/USD: 1.2670
EUR/ZAR: 9.2710
GBP/NZD: 2.2010
GBP/CAD: 1.6360
EUR/CHF: 1.3040
GBP/AED: 5.7060
And finally,
Have a good day
None of the information contained in this website constitutes, nor should be construed as financial advice.If you require anymore information please do not hesitate to call us on + 44 207 220 1740
|
