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24 Feb 2015
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GBP/USD breaks 1.55 ahead of speech by BoE”s Carney

United States Dollar: The Bank of England Inflation Hearings occurred yesterday at which Governor Carney and other MPC members testified on inflation and monetary policy before Parliament’s Treasury Select Committee. The outcome wasn’t very surprising as Carney said that the current crisis in the Eurozone is a threat and serious issue for the UK. He also said that the central bank is aiming to get CPI to 2% in 2 years. MPC member Martin Weale stated that interest rates may rise “earlier than financial markets currently anticipate” which went on to support the pound throughout much of the morning. Fed Chair Yellen then spoke in the afternoon. She testified before the Senate Banking Committee in Washington. The dollar jumped higher initially as Yellen seemed to indicate that lift-off in interest rates was possible any time. The context of the headline wasn’t entirely clear and Yellen went on to say that the Fed is preparing to consider rate hikes on a meeting-by-meeting basis, but firstly they would be removing the word ‘patient’ when describing its plan in setting rates. This would normally have been USD positive but her comments were tempered as she finished by saying “it is important to emphasize that a modification of the forward guidance should not be read as indicating that the committee will necessarily increase the target range in a couple of meetings”. GBP/USD was largely unchanged following Yellen’s testimony but it is pushing higher this morning in advance of another speech by Bank of England Governor Carney today. Both Yellen and Draghi are also due to speak so it’s an action packed day ahead. The dollar is a touch weaker this morning and cable has pushed through 1.55 to open at 1.5535. It’ll be interesting to see if this lasts and it may well present some good opportunities to sell GBP for some corporates that have been exasperated by the fall towards 1.50 over the past couple of months.

We expect a range today in the GBP/USD rate of 1.5440 to 1.5555

Euro: Greek bailout reforms were approved by Eurozone finance ministers yesterday and it means Greece can now obtain a four-month extension of its bailout. The euro was buoyed by the news but it hasn’t had a hugely positive impact just yet as there remain doubts around some assurances made by the Greek government, these reforms having been outlined in a letter written by finance minister Yani Varoufakis to Eurogroup President Jeroen Dijsselbloem. The IMF’s Christine Lagarde said "in quite a few areas, however, including perhaps the most important ones, the letter is not conveying clear assurances that the government intends to undertake the reforms envisaged." EUR/USD opens this morning at 1.1365 and GBP/EUR has rallied over the last couple of hours to open in London at 1.3645.

We expect a range today in the GBP/EUR rate of 1.3600 to 1.3680

Aussie and Kiwi Dollars: AUD/USD and NZD/USD have both pushed higher over the last 24 hours. The US dollar is a touch weaker, which has helped. Chinese HSBC Flash Manufacturing data was released overnight and printed better than expected, which helped too whilst a news article on Bloomberg suggesting that authorities will do something soon to counter the recent slump in the Chinese property market also supported both commodity currencies. The two open in London at .7895 and .7555 respectively vs. the greenback.

We expect a range today in the GBP/AUD rate of 1.9550 to 1.9740

We expect a range today in the GBP/NZD rate of 2.0440 to 2.0620

Data Releases

AUD: Private Capital Expenditure q/q

EUR: ECB President Draghi Speaks

GBP: BBA Mortgage Approvals, BOE Gov Carney Speaks

NZD: Trade Balance, Visitor Arrivals m/m

USD: Fed Chair Yellen Testifies, New Home Sales

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

24 Feb 2015
Share

GBP/USD breaks 1.55 ahead of speech by BoE”s Carney

United States Dollar: The Bank of England Inflation Hearings occurred yesterday at which Governor Carney and other MPC members testified on inflation and monetary policy before Parliament’s Treasury Select Committee. The outcome wasn’t very surprising as Carney said that the current crisis in the Eurozone is a threat and serious issue for the UK. He also said that the central bank is aiming to get CPI to 2% in 2 years. MPC member Martin Weale stated that interest rates may rise “earlier than financial markets currently anticipate” which went on to support the pound throughout much of the morning. Fed Chair Yellen then spoke in the afternoon. She testified before the Senate Banking Committee in Washington. The dollar jumped higher initially as Yellen seemed to indicate that lift-off in interest rates was possible any time. The context of the headline wasn’t entirely clear and Yellen went on to say that the Fed is preparing to consider rate hikes on a meeting-by-meeting basis, but firstly they would be removing the word ‘patient’ when describing its plan in setting rates. This would normally have been USD positive but her comments were tempered as she finished by saying “it is important to emphasize that a modification of the forward guidance should not be read as indicating that the committee will necessarily increase the target range in a couple of meetings”. GBP/USD was largely unchanged following Yellen’s testimony but it is pushing higher this morning in advance of another speech by Bank of England Governor Carney today. Both Yellen and Draghi are also due to speak so it’s an action packed day ahead. The dollar is a touch weaker this morning and cable has pushed through 1.55 to open at 1.5535. It’ll be interesting to see if this lasts and it may well present some good opportunities to sell GBP for some corporates that have been exasperated by the fall towards 1.50 over the past couple of months.

We expect a range today in the GBP/USD rate of 1.5440 to 1.5555

Euro: Greek bailout reforms were approved by Eurozone finance ministers yesterday and it means Greece can now obtain a four-month extension of its bailout. The euro was buoyed by the news but it hasn’t had a hugely positive impact just yet as there remain doubts around some assurances made by the Greek government, these reforms having been outlined in a letter written by finance minister Yani Varoufakis to Eurogroup President Jeroen Dijsselbloem. The IMF’s Christine Lagarde said "in quite a few areas, however, including perhaps the most important ones, the letter is not conveying clear assurances that the government intends to undertake the reforms envisaged." EUR/USD opens this morning at 1.1365 and GBP/EUR has rallied over the last couple of hours to open in London at 1.3645.

We expect a range today in the GBP/EUR rate of 1.3600 to 1.3680

Aussie and Kiwi Dollars: AUD/USD and NZD/USD have both pushed higher over the last 24 hours. The US dollar is a touch weaker, which has helped. Chinese HSBC Flash Manufacturing data was released overnight and printed better than expected, which helped too whilst a news article on Bloomberg suggesting that authorities will do something soon to counter the recent slump in the Chinese property market also supported both commodity currencies. The two open in London at .7895 and .7555 respectively vs. the greenback.

We expect a range today in the GBP/AUD rate of 1.9550 to 1.9740

We expect a range today in the GBP/NZD rate of 2.0440 to 2.0620

Data Releases

AUD: Private Capital Expenditure q/q

EUR: ECB President Draghi Speaks

GBP: BBA Mortgage Approvals, BOE Gov Carney Speaks

NZD: Trade Balance, Visitor Arrivals m/m

USD: Fed Chair Yellen Testifies, New Home Sales

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