Sterling Suffers Again
July 6, 2009
With Friday being a US holiday it was expected that we would see some volatility within the trading ranges. In UK trading we did not see a jot as the markets remained relatively quiet ahead of the weekend.
The situation changed in Asian trading as risk aversion was ratcheted up a couple of notches due to a few contributing factors. Firstly the hangover of the payroll data on Thursday was still apparent and undermined any move into risky assets.
In addition the civil unrest in China did not help. Here violence in the western region of Xinjiang has left at least 140 people dead and more than 800 people injured helping the case for risk aversion. We also have jitters ahead of the Obama-Medvedev meeting in Moscow on the reduction of nuclear warheads.
The US Dollar has made gains especially against sterling where it has moved below the crucial support of 1.62 to 1.6140 currently, this is a break lower in the recent trading range. Sterling has not been helped with news that the Bank Of England’s monetary policy committee is expected to extend its programme of quantitative easing by £25 billion this week. This is sterling negative, especially given the fact the Europe have not committed to extend their programme on QE. If the extension does proceed it is likely that this will be the last expansion of the QE programme by the Bank of England.
Not a great deal in terms of data today. We have Euro zone sentix investor confidence which is expected slightly better at -25 from previous -27. This stat underlines investor confidence towards the euro zone economy.
Watch out for sterling today as technically and fundamentally it is on the ropes. This is very apparent against the Japanese Yenwhere the rate has slumped to 153 from 159 at the end of last week. Against the USDthe 1.60 level could now come under pressure and 1.15 against the euro, therefore this week is a big week for sterling to underline and consolidate its recent gains. If it breaks below the key levels mentioned it could be a case of mind the gap as we look then towards 1.55 and 1.10 again.
Report by Phil McHugh
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Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.The contents of this report are for information purposes only. Currencies Direct and MarketClub Updates are compiled by Tom Nadir.You can view new trading videos by clicking here, with my compliments.
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Sterling Under Pressure
July 6, 2009
With Friday being a US holiday it was expected that we would see some volatility within the trading ranges. In UK trading we did not see a jot as the markets remained relatively quiet ahead of the weekend.
The situation changed in Asian trading as risk aversion was ratcheted up a couple of notches due to a few contributing factors. Firstly the hangover of the payroll data on Thursday was still apparent and undermined any move into risky assets.
In addition the civil unrest in China did not help. Here violence in the western region of Xinjiang has left at least 140 people dead and more than 800 people injured helping the case for risk aversion. We also have jitters ahead of the Obama-Medvedev meeting in Moscow on the reduction of nuclear warheads.
The US Dollar has made gains especially against sterling where it has moved below the crucial support of 1.62 to 1.6140 currently, this is a break lower in the recent trading range. Sterling has not been helped with news that the Bank Of England’s monetary policy committee is expected to extend its programme of quantitative easing by £25 billion this week. This is sterling negative, especially given the fact the Europe have not committed to extend their programme on QE. If the extension does proceed it is likely that this will be the last expansion of the QE programme by the Bank of England.
Not a great deal in terms of data today. We have Euro zone sentix investor confidence which is expected slightly better at -25 from previous -27. This stat underlines investor confidence towards the euro zone economy.
Watch out for sterling today as technically and fundamentally it is on the ropes. This is very apparent against the Japanese Yen
where the rate has slumped to 153 from 159 at the end of last week. Against the USD
the 1.60 level could now come under pressure and 1.15 against the euro, therefore this week is a big week for sterling to underline and consolidate its recent gains. If it breaks below the key levels mentioned it could be a case of mind the gap as we look then towards 1.55 and 1.10 again.
Report by Phil McHugh
Receive daily currency rate updates and market commentaries direct to your e-mail daily FREE from Currencies Direct
Currencies Direct & Forex trading
Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.
The contents of this report are for information purposes only. Currencies Direct and MarketClub Updates are compiled by Tom Nadir.
You can view new trading videos by clicking here, with my compliments.
Posted in Currencies Direct Tagged: Bank Of England’s monetary policy, Currencies Direct, Currencies Direct and MarketClub Updates, currency market updates, marketclub updates, Phil McHugh, tom nadir 
