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21 Dec 2015

Commodity currencies turn positive amid subdued trading

United States Dollar: It’s been a rather subdued start to the week, hardly surprising in the run up to the holiday season and amid a lack of major economic releases. GBP/USD fell below 1.49 and bottomed out at 1.4880. It opens not too far off this level this morning at 1.4885. We might well be in for more of the same today with only Public Sector Net Borrowing due for release from the UK. Final GDP from the US will be the one to watch and might create some volatility come 1:30 pm today.

We expect a range today in the GBP/USD rate of 1.4800 to 1.5000

Euro: EUR/USD has continued to trend higher over the last 12-24 hours. It started the day down at close to the 1.0850 level yesterday but once New York turned up it was well bid up and through 1.0900. It traded to a high of 1.0940 by the end of the day but has settled back overnight to open this morning at 1.0915. The euro is also stronger vs. the pound and GBP/EUR trades at 1.3640 this morning.

We expect a range today in the GBP/EUR rate of 1.3600 to 1.3710

Aussie and Kiwi Dollars: Commodity currencies including the AUD and NZD have performed strongly over the last 12-24 hours. Regional equities through Australasia and Asia have been relatively positive too which has been supportive. AUD/USD has broken back through .7200 overnight and NZD/USD is up and above the .68 figure. Both GBP/AUD and GBP/NZD are lower as a result and trade at 2.0570 and 2.1810 currently.

We expect a range today in the GBP/AUD rate of 2.0490 to 2.0700

We expect a range today in the GBP/NZD rate of 2.1600 to 2.1920

Data Releases

AUD: No data

EUR: Belgian NBB Business Climate

GBP: Public Sector Net Borrowing

NZD: Trade Balance

USD: Final GDP q/q, HPI m/m, Existing Home Sales, Richmond Manufacturing Index

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