United States Dollar: GBP/USD, yesterday continued the theme of broad dollar weakness as both US Housing starts and building permits failed to stem the tide. Housing starts posted 1.089M vs 1.170M exp and 1.178M the previous month, the lowest level in five months. Building permits fell to 11.086M vs 1.2M exp and 1.167M the previous month. This was following a downward revision of January figures and an upwards revision of February’s. As such the pair gained from an opening price of 1.4330 to an intraday high of 1.4415. Yesterday’s speech by Bank of England Governor Carney may have further helped sterling as he chose to downplay the risk Brexit risks by stating China shocks pose a bigger risk to the UK outlook. Today seems preliminary UK employment data with the release of Average Earnings and ILO employment rate for February plus the Claimant count for March which the US posts Existing home sales data this afternoon. We open today with GBP/USD at 1.4375.
We expect a range today in the GBP/USD rate of 1.4325 to 1.4425.
Euro: GBP/EUR again felt the knock on effects of the dollar weakness with sterling appreciating to an overnight high of 1.2680. The gains however were eaten away during Asia trading with the pair falling back to yesterday’s opening price of 1.2635. European markets opened to the new that German Producer price index missed expectations. Monthly figures came in at 0% which is an improvement from last month’s number of -0.5% but below predictions of 0.2%. This means annualised PPI for Germany is at -3.1% vs 2.9% exp. No further data is due from Europe so it will be up to UK earnings and employment numbers along with ECB president Draghi speak in Frankfurt to prove direction. We open today with GBP/EUR at 1.2650. EUR/USD, the Euro also rose against its US counterpart through yesterday following the disappointing US housing starts and building permit figures. As mentioned above both sets of data missed expectations and housing starts fell to their lower level for five months thus pushing Euro dollar to a peak of 1.1382. Some of the single currencies gains have been eaten away this morning as German PPI missed predictions and markets now turn their attention to ECB president Draghi’s speech at 10am and US Home sales this afternoon. We open today with EUR/USD at 1.1355.
We expect a range today in the GBP/EUR rate of 1.26 to 1.27
Aussie and Kiwi Dollars: The Australian Dollar performed strongly yesterday and hit 10 month highs against the USD of 0.7826. It was a strong day for the AUD after expectations around the Fed’s monetary policy stance were tempered. Overnight the greenback pulled back a little against the commodity linked currencies as oil price weakened after Kuwait oil workers called off a three-day strike. Yesterday’s NZD global dairy trade price index helped the Kiwi fend off some of the dollar’s gains following an improvement by 1.7% to 3.8% the previous month. We open today with GBP/AUD at 1.8395 and GBP/NZD at 2.0490
We expect a range today in the GBP/AUD rate of 1.8310 to 1.8465
We expect a range today in the GBP/NZD rate of 2.0425 to 2.0575
AUD: National Australia Bank’s business confidence (QoQ) (Q1), RBA Foreign exchange transaction (Mar)
EUR: ECB president Draghi speech
GBP: Average Earnings, ILO Unemployment Rate, Claimant Count Rate, Claimant Count Change
NZD: Visitor Arrivals
USD: MBA Mortgage applications, Existing Home Sales, Existing home Sales Change
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