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15 Mar 2015
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GBP/USD slips below 1.47 as Fed statement comes in to focus

United States Dollar: The pound fell again on Friday and at one point look liked it would fall below 1.47 vs. the dollar. In the end it didn’t and has since recovered off of Friday’s low of 1.4703 to open this morning at 1.4770, but it still looks a bit wobbly and vulnerable and with the Fed statement due later this week there’s a good chance this level could still be taken out. Weaker than expected US data was largely ignored on Friday; this included below forecast Prelim Consumer Sentiment and the Producer Price Index. Weaker than expected UK Construction Output wasn’t ignored though and contributed a good part to the pound’s sell-off throughout the morning on Friday 13th. As mentioned already, the Fed are due to make their monetary policy statement on Wednesday and should they remove the word ‘patience’ (with regards to raising interest rates) the dollar strength looks set to continue. The statement is arguably the main market event this week. Wednesday is a busy day - UK employment and average earnings data is also released and has the potential to underline Carney’s fairly dovish comments on inflation last week.

We expect a range today in the GBP/USD rate of 1.4750 to 1.4865

Euro: EUR/USD also ticked lower on Friday. There are continued concerns as to whether Greece can meet its bailout commitments whilst the relationship between Greece and Germany becomes even more strained as a war of words develops between the German and Greek finance minister’s, Wolfgang Schauble and Yani Varoufakis. EUR/USD fell to a low of 1.0462 on Friday afternoon but it has recovered since markets opened early this morning and trades at 1.0535 currently. GBP/EUR holds on to 1.40 for now as the pound remains under a bit of pressure following the BoE Governor’s comments last week. German ZEW and a speech by ECB President Draghi are on the calendar for Monday and Tuesday.

We expect a range today in the GBP/EUR rate of 1.3980 to 1.4065

Aussie and Kiwi Dollars: NZD/USD rallied from .7315 to .7385 first thing this morning and it opens close to the upper end of the range in London at .7360. AUD/USD has been steadier by comparison and trades at .7640. Trading in this pair is likely to remain fairly subdued in the run up to tonight’s RBA Monetary Policy Meeting Minutes. There was a bit of surprise that the central bank left rates on hold at the last meeting so investors and traders will be keen to understand why and whether there’s any indication we’ll see a rate cut at the next meeting in three weeks’ time. GBP/AUD and GBP/NZD have continued to lose ground since Friday morning and trade at 1.9375 and 2.0100 respectively.

We expect a range today in the GBP/AUD rate of 1.9280 to 1.9465

We expect a range today in the GBP/NZD rate of 2.0045 to 2.0190

Data Releases

AUD: Monetary Policy Meeting Minutes

EUR: ECB President Draghi Speaks

GBP: CB Leading Index m/m

NZD: No data

USD: Empire State Manufacturing Index, Capacity Utilization Rate, Industrial Production m/m, NAHB Housing Market Index, TIC Long-Term Purchases

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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15 Mar 2015
Share

GBP/USD slips below 1.47 as Fed statement comes in to focus

United States Dollar: The pound fell again on Friday and at one point look liked it would fall below 1.47 vs. the dollar. In the end it didn’t and has since recovered off of Friday’s low of 1.4703 to open this morning at 1.4770, but it still looks a bit wobbly and vulnerable and with the Fed statement due later this week there’s a good chance this level could still be taken out. Weaker than expected US data was largely ignored on Friday; this included below forecast Prelim Consumer Sentiment and the Producer Price Index. Weaker than expected UK Construction Output wasn’t ignored though and contributed a good part to the pound’s sell-off throughout the morning on Friday 13th. As mentioned already, the Fed are due to make their monetary policy statement on Wednesday and should they remove the word ‘patience’ (with regards to raising interest rates) the dollar strength looks set to continue. The statement is arguably the main market event this week. Wednesday is a busy day - UK employment and average earnings data is also released and has the potential to underline Carney’s fairly dovish comments on inflation last week.

We expect a range today in the GBP/USD rate of 1.4750 to 1.4865

Euro: EUR/USD also ticked lower on Friday. There are continued concerns as to whether Greece can meet its bailout commitments whilst the relationship between Greece and Germany becomes even more strained as a war of words develops between the German and Greek finance minister’s, Wolfgang Schauble and Yani Varoufakis. EUR/USD fell to a low of 1.0462 on Friday afternoon but it has recovered since markets opened early this morning and trades at 1.0535 currently. GBP/EUR holds on to 1.40 for now as the pound remains under a bit of pressure following the BoE Governor’s comments last week. German ZEW and a speech by ECB President Draghi are on the calendar for Monday and Tuesday.

We expect a range today in the GBP/EUR rate of 1.3980 to 1.4065

Aussie and Kiwi Dollars: NZD/USD rallied from .7315 to .7385 first thing this morning and it opens close to the upper end of the range in London at .7360. AUD/USD has been steadier by comparison and trades at .7640. Trading in this pair is likely to remain fairly subdued in the run up to tonight’s RBA Monetary Policy Meeting Minutes. There was a bit of surprise that the central bank left rates on hold at the last meeting so investors and traders will be keen to understand why and whether there’s any indication we’ll see a rate cut at the next meeting in three weeks’ time. GBP/AUD and GBP/NZD have continued to lose ground since Friday morning and trade at 1.9375 and 2.0100 respectively.

We expect a range today in the GBP/AUD rate of 1.9280 to 1.9465

We expect a range today in the GBP/NZD rate of 2.0045 to 2.0190

Data Releases

AUD: Monetary Policy Meeting Minutes

EUR: ECB President Draghi Speaks

GBP: CB Leading Index m/m

NZD: No data

USD: Empire State Manufacturing Index, Capacity Utilization Rate, Industrial Production m/m, NAHB Housing Market Index, TIC Long-Term Purchases

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