United States Dollar:
It’s been a fairly quiet week in FX markets. GBP/USD pushed up through 1.49 yesterday afternoon and reached a high of 1.4970 - it opens close to this level this morning at 1.4965. Bank of England MPC minutes are due today – they’re expected to show members were unanimous in favour of keeping interest rates on hold earlier in the month so might not come as much of a surprise. The report will also likely reveal officials’ thoughts on the low rate of inflation. Existing home sales data is due out from the U.S. later, but apart from that it looks set to be another steady day for GBP/USD.
We expect a range today in the GBP/USD rate of 1.4900 to 1.5010.
Euro:
EUR/USD has ticked slightly higher over the past 24 hours. German ZEW data released yesterday morning – although coming in below market expectations – was generally strong, printing at above the 50.0 level (indicating economic optimism) and so was mildly supportive of the single currency. The dollar trended lower as New York came online, at which point EUR/USD traded to a day high of 1.0780 and it has generally held firm throughout the Asia session to open this morning at 1.0758. The currency has traded a flat range against GBP with GBP/EUR opening this morning at 1.3905.
We expect a range today in the GBP/EUR rate of 1.3860 to 1.3945.
Aussie and Kiwi Dollars:
AUD/USD gapped higher overnight following the release of stronger than expected Australian inflation data. Given that q/q number only beat forecasts by 0.1%, coming in at 0.2%, it was a bit of surprise to see AUD/USD rally from .7715 to open in London at .7785. However, it seemed like a good enough excuse for traders to take profit on some overly shorty AUD positions. NZD/USD has been steadier by comparison but has tracked AUD/USD to an extent and trades at .7710 currently.
We expect a range today in the GBP/AUD rate of 1.9150 to 1.9300.
We expect a range today in the GBP/NZD rate of 1.9310 to 1.9550.
Data releases for the next 24 hours:
AUD: NAB Quarterly Business Confidence
EUR: Italian Retail Sales m/m, Consumer Confidence
GBP: MPC Official Bank Rate Votes
NZD: Visitor Arrivals m/m, Credit Card Spending y/y
USD: HPI m/m, Existing Home Sales, Crude Oil Inventories
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