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17 Dec 2015

Calm prevails after the FOMC storm

United States Dollar: GBP/USD spiked on better than expected UK Retail Sales data yesterday. It was only a spike mind as dollar bidders took charge and drove the USD higher across the board following the Fed’s decision to hike interest rates earlier in the week. Commodity prices and oil are also continuing to be hit hard – also good for the greenback. And despite weaker than expected Philly Fed Manufacturing yesterday GBP/USD has fallen under 1.4900. It dropped to a low of 1.4870 yesterday evening but has since recovered to open this morning at 1.4935. There isn’t much by way of economic data on the way today and so it might be a quiet finish to the week.

We expect a range today in the GBP/USD rate of 1.4880 to 1.5000

Euro: EUR/USD dropped down close to the 1.08 big figure yesterday, this after starting the day at 1.0870. Like GBP/USD, the move was down to broad dollar strength post the FOMC announcement. The release of weaker than expected German IFO business climate data didn’t particularly help the euro’s cause yesterday. It has clawed its way back since though and opens in London at 1.0850. GBP/EUR has been relatively steady over the last day or so and trades at 1.3765 currently.

We expect a range today in the GBP/EUR rate of 1.3700 to 1.3810

Aussie and Kiwi Dollars: Both AUD/USD and NZD/USD have felt the wrath of falling commodity prices over the last few weeks. It means that both currencies continue to trade on the back foot this morning and open at .7155 and .6710 respectively. Meanwhile, the firmer USD has also had an impact. Both GBP/AUD and GBP/NZD have traded sideways in the meantime and open in London at 2.0865 and 2.2245.

We expect a range today in the GBP/AUD rate of 2.0780 to 2.0940

We expect a range today in the GBP/NZD rate of 2.2100 to 2.2350

Data Releases

AUD: No data

EUR: Current Account

GBP: No data

NZD: No data

USD: Flash Services PMI

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