United States Dollar:
Risk sentiment waned on Friday as violence in Gaza escalated and geopolitical tensions intensified following the Malaysian airways crash. There were also some rumours doing the rounds on Friday that BoE Governor Carney gave an interview to a weekend paper in which he appeared dovish on monetary policy. It turned out to be a false rumour - he didn’t give an interview - but GBP/USD fell to a low of 1.7037 from 1.7115 on the whispers. The pair has recovered overnight but investors remain cautious for obvious reasons. Today is a fairly light day for economic data. US CPI is due for release tomorrow. The MPC meeting minutes are then due for release on Wednesday with BoE Governor Carney due to speak that afternoon. UK retail sales follow on Thursday with Prelim GDP on Friday.
We expect a range today in the GBP/USD rate of 1.7010 to 1.7125
Euro:
EUR/USD snapped to a low of 1.3492 on Friday as risk was sold. The Bundesbank and ECB’s Governing Council member Jens Weidmann spoke on Friday and said that the ECB wouldn’t consider the state of public finances when it came to raising interest rates. He went on to say that he thought the central bank should hold off on additional accommodative policy. Interesting comments but they didn’t have too much of an impact on the single currency. The pair recovered throughout the day on Friday and eventually traded to a high of 1.3548 in the overnight session. It opens this morning at 1.3525. Geopolitics will likely dominate the forex headlines today amid a lack of European economic data.
We expect a range today in the GBP/EUR rate of 1.2580 to 1.2655
Aussie and Kiwi Dollars:
AUD/USD has traded sideways over the last 12-24 hours (within a 20 point range in Sydney). NZD/USD meanwhile has pushed steadily higher as it looks increasingly likely that the RBNZ will raise the Official Cash Rate later this week from 3.25% to 3.5%. It has popped its head through the .8700 figure overnight, having traded to a session high of.8720. It opens in London at .8695 whilst AUD/USD sits at .9380. RBA Governor Stevens is due to speak later tonight and his comments may have an impact although Gaza/Ukraine headlines will no doubt dominate.
We expect a range today in the GBP/AUD rate of 1.8120 to 1.8260
We expect a range today in the GBP/NZD rate of 1.9550 to 1.9745
Data Releases for the next 24 hours:
AUD: RBA Gov Stevens Speaks
EUR: German Buba Monthly Report
GBP: No data
NZD: No data
USD: No data
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