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29 Dec 2015

Dollar strengthens in reaction to positive confidence data

United States Dollar: The pound took a bit of tumble against the US dollar yesterday following a stellar print in US Consumer Confidence and an indifferent reading in the Goods Trade Balance. The confidence index came in a t 96.5 vs. forecasts for 93.9 and with trading conditions quite thin at the moment, GBP/USD reacted a bit more to this data than it normally would have. It fell to a low of 1.4793 yesterday evening but has recovered since to open this morning at 1.4835. US Pending Home Sales is due today and will be the focus for the few active investors and traders that are working over the Christmas period.

We expect a range today in the GBP/USD rate of 1.4760 to 1.4900

Euro: EUR/USD also dropped following the release of stronger than expected US economic data yesterday. It started the day on Tuesday at 1.0990 and ended the day down at 1.0895. Like GBP/USD it has recovered to open in London at 1.0935. Spanish Flash CPI is due this morning with the market expecting growth in prices of 0.1%. GBP/EUR has been steady in the meantime and trades at 1.3555.

We expect a range today in the GBP/EUR rate of 1.3510 to 1.3580

Aussie and Kiwi Dollars: Commodity linked currencies such as the AUD and NZD have pushed higher in line with the rise in oil prices over the last 24-48 hours. Oil is back up and close to $38. AUD/USD trades at .7285 and NZD/USD sits at .6845. GBP/AUD and GBP/NZD open in London at 2.0340 and 2.1650 respectively.

We expect a range today in the GBP/AUD rate of 2.0280 to 2.0410

We expect a range today in the GBP/NZD rate of 2.1570 to 2.1710

Data Releases

AUD: Private Sector Credit m/m

EUR: Spanish Flash CPI y/y, M3 Money Supply y/y, Private Loans y/y

GBP: No data

NZD: No data

USD: Pending Home Sales m/m, Crude Oil Inventories

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