In the absence of any tier one data releases in the UK today, the Pound was susceptible to technical trading as several of the other majors made significant moves. Sterling remains subdued as the futures markets predict that a rate hike is a long way off. Tomorrow’s consumer confidence survey and public sector borrowing figures will provide further direction . NEAR-TERM OUTLOOK – NEUTRAL.
The Dollar has come under sustained selling pressure in the markets today as stock markets recovered their poise following the Japanese earthquake. EUR/USD is holding above 1.4000 and GBP/USD is edging towards the top of its recent range. This afternoon’s worse-than-expected US industrial production figure and rising oil prices hurt the Greenback further. NEAR-TERM OUTLOOK – NEGATIVE.
The Euro has stayed resilient as concerns over Eurozone sovereign debts continue. Tomorrow’s German producer prices figure is the main release of significance for the remainder of the week. With the market pricing in a 100% chance of an ECB rate rise, the Euro will be in for a mighty fall if ECB policy makers elect to maintain rates at 1.00%. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.
The Australian Dollar has come under heavy selling pressure in the markets today as fears persist over the political situation in the Middle East. The Aussie has lost almost one percentage point against Sterling during today’s European session but these losses could be re-traced if the bounce in Asian stock markets continues tonight. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.
The Kiwi Dollar has lost over 2% against the Pound on the day today. These losses were largely due to comments made by the New Zealand Finance Minister who stated that the NZ government would need to borrow NZD10bn from the markets in order to finance the re-building of Christchurch. He went on to predict that New Zealand’s national debt would rise to over 30% of its GDP by mid-2014. NEAR-TERM OUTLOOK – NEGATIVE.
The Canadian Dollar has lost ground against most of the majors in spite of a rise in oil prices. This has partly been a technical move, as the CAD has gained a significant amount of ground in recent weeks. Analysts have suggested in recent weeks that the Canadian Dollar is acting as an alternative safe-haven currency to the US Dollar, so today’s losses could be a case of the CAD mirroring the Greenback. (www.www.currencynews.co.uk)