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05 Feb 2015
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Euro bumps higher on reports of SNB intervention

United States Dollar: EUR/USD bounced back yesterday on the back of rumours that the SNB was buying EUR/USD and USD/CHF in an attempt to weaken the value of the Swiss franc. GBP/USD was dragged higher by EUR/USD, steadily rising from 1.5195 to a high of 1.5341 over the day. The Bank of England’s monetary policy announcement was a complete non-event as the central bank opted to leave interest rates and QE on hold. Later on in the day, US trade balance data showed that America’s trade deficit increased unexpectedly in December to a two-year high of $46.6 billion. It didn’t really have an effect on the dollar, although it did continue to weaken following the print. The big event today will be US non-farm payrolls due at 1:30pm GMT. Employment numbers from the States have been impressive over the last few months and it’s a good reason that the Fed is one of, if not the only major central bank that could well be looking to tighten monetary policy this year. This afternoon’s data will either underline these expectations, of if weaker than expected, could in fact par back expectations for a Fed rate hike, especially so as pressure on global consumer prices continues to cause concern around the world.

We expect a range today in the GBP/USD rate of 1.5250 to 1.5345

Euro: As mentioned above EUR/USD bounced yesterday, firstly following the release of stronger than expected German factory orders for December which came in at 4.2% vs. forecasts for 1.4% and then following the reports of heavy SNB bids in the pair. Meanwhile the headlines on Greece continue to flow - the ECB’s Praet was speaking yesterday, defending the bank’s policy on ending its exemption from credit requirements for Greek bonds. Despite the recovery in EUR/USD, GBP/EUR has remained relatively firm and opens in London at 1.3375.

We expect a range today in the GBP/EUR rate of 1.3320 to 1.3430

Aussie and Kiwi Dollars: Both AUD/USD and NZD/USD bumped higher yesterday. The former broke higher after the RBA monetary policy statement overnight. 2015 growth forecasts were revised down slightly but the bank expects that lower interest rates and a falling currency should support growth through 2016/17. 2016 growth forecasts were upgraded slightly to 3-4% from 2.75% - 4.25%. It was a public holiday in New Zealand but the kiwi still moved higher in line with the AUD and on the back of a weakening USD. Non-Farm Payrolls this afternoon will no doubt have an impact on both currencies today.

We expect a range today in the GBP/AUD rate of 1.9450 to 1.9620

We expect a range today in the GBP/NZD rate of 2.0520 to 2.0740

Data Releases

AUD: No data

EUR: French Gov Budget Balance, French Trade Balance

GBP: Trade Balance

NZD: No data

USD: Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings m/m, Consumer Credit m/m

If you want instant updates on movements in the FX market and fast access to the UKForex daily commentary, follow us on twitter at http://twitter.com/ukforex or @ukforex

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05 Feb 2015
Share

Euro bumps higher on reports of SNB intervention

United States Dollar: EUR/USD bounced back yesterday on the back of rumours that the SNB was buying EUR/USD and USD/CHF in an attempt to weaken the value of the Swiss franc. GBP/USD was dragged higher by EUR/USD, steadily rising from 1.5195 to a high of 1.5341 over the day. The Bank of England’s monetary policy announcement was a complete non-event as the central bank opted to leave interest rates and QE on hold. Later on in the day, US trade balance data showed that America’s trade deficit increased unexpectedly in December to a two-year high of $46.6 billion. It didn’t really have an effect on the dollar, although it did continue to weaken following the print. The big event today will be US non-farm payrolls due at 1:30pm GMT. Employment numbers from the States have been impressive over the last few months and it’s a good reason that the Fed is one of, if not the only major central bank that could well be looking to tighten monetary policy this year. This afternoon’s data will either underline these expectations, of if weaker than expected, could in fact par back expectations for a Fed rate hike, especially so as pressure on global consumer prices continues to cause concern around the world.

We expect a range today in the GBP/USD rate of 1.5250 to 1.5345

Euro: As mentioned above EUR/USD bounced yesterday, firstly following the release of stronger than expected German factory orders for December which came in at 4.2% vs. forecasts for 1.4% and then following the reports of heavy SNB bids in the pair. Meanwhile the headlines on Greece continue to flow - the ECB’s Praet was speaking yesterday, defending the bank’s policy on ending its exemption from credit requirements for Greek bonds. Despite the recovery in EUR/USD, GBP/EUR has remained relatively firm and opens in London at 1.3375.

We expect a range today in the GBP/EUR rate of 1.3320 to 1.3430

Aussie and Kiwi Dollars: Both AUD/USD and NZD/USD bumped higher yesterday. The former broke higher after the RBA monetary policy statement overnight. 2015 growth forecasts were revised down slightly but the bank expects that lower interest rates and a falling currency should support growth through 2016/17. 2016 growth forecasts were upgraded slightly to 3-4% from 2.75% - 4.25%. It was a public holiday in New Zealand but the kiwi still moved higher in line with the AUD and on the back of a weakening USD. Non-Farm Payrolls this afternoon will no doubt have an impact on both currencies today.

We expect a range today in the GBP/AUD rate of 1.9450 to 1.9620

We expect a range today in the GBP/NZD rate of 2.0520 to 2.0740

Data Releases

AUD: No data

EUR: French Gov Budget Balance, French Trade Balance

GBP: Trade Balance

NZD: No data

USD: Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings m/m, Consumer Credit m/m

If you want instant updates on movements in the FX market and fast access to the UKForex daily commentary, follow us on twitter at http://twitter.com/ukforex or @ukforex

Learn more about