Forex Focus
GBP/USD Performance Chart (02/09/10 12:00)
| Daily % Chg | -0.36% | 3 months | 6.54% | |
| 1 week | -0.83% | 6 months | 2.44% | |
| 1 month | -3.47% | 1 year | -4.71% |
Details
| Prev close | 1.5455 | 52 week high | 1.6878 | ||
| Last trade | 1.5399 | 52 week low | 1.4231 | ||
| High | 1.5460 | Low | 1.5373 |
Bloomberg Median Forecasts
| Q1 2010 | 1.60 | Q3 2010 | 1.52 | ||||
| Q2 2010 | 1.47 | Q4 2010 | 1.49 | |
Commentary
Confidence in sterling is slowly beginning to fade as recent economic indicators from the UK are pointing to a slowing economy. GBP/USD weakened this morning after Nationwide reported a 0.9% drop in UK house prices in August, continuing from the 0.5% downward trend the prior month. On the positive side, Nationwide believes that further price declines are likely to remain modest as supply and demand dynamics rebalance. Further undermining confidence in the UK economic recovery was a report from Markit and the Chartered Institute of Purchasing and Supply (CIPS) that showed construction slowing in August. The Markit/CIPS Purchasing Managers' Index for construction fell for the third consecutive month to a reading of 52.1, lead by a slowdown in residential construction. The data follows yesterday's report from Markit and CIPS that the UK manufacturing sector is showing signs of cooling. Sterling could come under further selling pressure if this afternoon's US jobless claims and tomorrow's non-farm payrolls come in worse than expected, which is likely to see a flight to safety and hurt GBP/USD. David Choe, London
EUR/USD Performance Chart (02/09/10 12:00)
| Daily % Chg | 0.11% | 3 months | 7.15% | |
| 1 week | 0.84% | 6 months | -5.58% | |
| 1 month | -3.08% | 1 year | -9.85% |
Details
| Prev close | 1.2809 | 52 week high | 1.5144 | ||
| Last trade | 1.2823 | 52 week low | 1.1877 | ||
| High | 1.2839 | Low | 1.2777 |
Bloomberg Median Forecasts
| Q1 2010 | 1.39 | Q3 2010 | 1.25 | ||||
| Q2 2010 | 1.25 | Q4 2010 | 1.25 |
Commentary
The euro was stronger against the US dollar ahead of this afternoon's ECB interest rate decision. The euro was defensive during Asian trading as investors mulled over the prospect that the ECB may announce an extension to its liquidity facility for banks at today's policy meeting. EUR/USD broke out during European trading, however, tracking gains in the equity market. Helping to lift the euro was better-than-expected year-on-year growth in eurozone GDP. Eurostat reported this morning that GDP in the euro area grew by 1.9% in the second quarter compared to a year ago, which was ahead of the 1.7% growth economists were expecting. The same report showed that household consumption increased by 0.5% in the second quarter while corporate investments increased 1.8%. This demonstrates the ability of the eurozone nations to continue with growth following the fallout of the European sovereign debt crisis. The ECB interest rate decision is scheduled for release at 12:45pm (London time) with ECB President Jean-Claude Trichet to hold a press conference at 1:30pm. Interest rates are expected to be kept on hold at 1% so the attention will be on Mr Trichet's press conference and what he reveals about the health of the European recovery. David Choe, London
AUD/USD Performance Chart (02/09/10 12:00)
| Daily % Chg | -0.34% | |
3 months | 10.35% | |
| 1 week | 2.52% | 6 months | 0.94% | ||
| 1 month | -0.45% | 1 year | 10.00% |
Details
| Prev close | 0.9117 | 52 week high | 0.9406 | ||
| Last trade | 0.9086 | 52 week low | 0.8067 | ||
| High | 0.9117 | Low | 0.9055 |
Bloomberg Median Forecasts
| Q1 2010 | 0.90 | Q3 2010 | 0.88 | ||||
| Q2 2010 | 0.90 | Q4 2010 | 0.87 |
Commentary
The Aussie dollar was weaker against the US dollar this morning after Australia's trade balance narrowed by more than economists had forecast. Australia's trade surplus shrunk from $3.44 billion to $1.89 billion in July following a drop in exports to resource-hungry nations China and India. A reduction in the trade balance suggests that Australia imported more than they exported, which generally weakens their currency as there is less demand for goods denominated in Australian dollars. On the other side of the equation, increasing imports means that Australians are selling their Australian dollars to purchase goods denominated in foreign currency, increasing the supply of Australian dollars available in the international money market, thereby weakening the currency. The next catalyst for AUD/USD is likely to come at 1:30pm (London time) today, when the weekly US jobless claims data will be released and ECB President Jean-Claude Trichet is expected to make an address regarding the ECB's latest interest rate decision. David Choe, London
Notes: Chart data sourced from Bloomberg. Bloomberg Median Forecasts are produced by Bloomberg by taking the median level from rates forecast by a number of contributors. These contributors consist of leading banks and security firms.
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