Daily FX Market Commentary
Good morning, please see today’s entry to our Daily FX Market Commentary.
Again, the Dollar continued it’s march against the Pound. The talk of the week – being the decisions of London City chiefs to back an exit of the UK from the European Union – has led investors to seek the safety of the USD.
Add to this the serious slump in Chinese stock market performances yesterday and the day before and it might seem as if the flight to safety investors should form an orderly queue to buy into the Dollar.
The GBPUSD high of the day was 1.4012 but the low, a fresh low, was 1.3880.
We are trading at 1.3933 as I write.
Today on the economic data front, we have some employment data for the States, which is shaping up to show improvements. Also, we are expecting some indication of how many durable goods are being ordered from manufacturers. Important given durable goods (expected to last three years or more) are typically higher ticket items and can show confidence in the economy where people buy more expensive things if they think their job is safe, for example.
The EUR hasn’t really managed to capitlise on the GBP’s rocky week. Where investors have shed the Pound following the ‘Brexit’ conversation and comments from Governor of the Bank of England, Mark Carney, they have not pooled heavily into the EUR.
The EUR has had some of it’s own weaker economic data to contend with. We saw weaker German data, being the largest Eurozone economy this can be significant. It can put pressure on the European Central Bank to take some kind of supportive action (again) and that would send the investors running – likely toward the USD, which would further press on the GBP as well.
The high of yesterday was 1.2727 and the low 1.2622. As I write 1.2645.
Risk today to the EUR comes from their inflation data. It is a critical figure, but of course the UK’s currency is so bearish it has some wiggle room for now.
We’ve all read the papers and seen the news about the potential ‘Brexit’ and what this means etc The affect on the GBP has been marked and relentless, but thankfully slower with every day.
The UK GDP figures are due today and are always important. I think today, though, there really only exists a risk of losing more ground. If the figure shows a positive growth number, I am not convinced this would translate into gains for our currency.
It is actually forecast for the figure to remain unchanged from the last reading….we had better hope this is on or better because if not, I think today will be a long day for the GBP.