UN: Euro at lowest level against dollar since February
EURUSD yesterday fell to its lowest levels since February this year breaking below a key support level of 1.35. The fall was attributed to an increase in short-term U.S. Treasury yields increasing speculation that the US will need to raise interest rates.
The dollar gained further strength yesterday after the U.S. consumer prices index rose in line with expectations to 2.1% in June (YOY). The US house price index in May also rose more than expected to 0.4% against a forecast 0.2%, and US existing home sales for June also came in higher than expected at 2.6% against a forecast 2%.
EURUSD hit a low of 1.3458 and closed down yesterday at 1.3466. This morning the pair was trading down at 1.3463 at 08:00 am. In London.
GBPAUD weakened yesterday on the back of comments from Glenn Stevens who said he was happy with current Australian interest rates and made no attempt to talk down the currency. GBPAUD hit a low yesterday of 1.8116 before rebounding and closing slightly down for the day at 1.8169.
Data released early this morning strengthened the Australian dollar with AUD Q2 CPI increasing as forecast to 3% from the previous year of 2.9%. The pair was already trading down nearly 1 cent at 1.8071 at 08:00 a.m. in London.
The South African rand strengthened yesterday after South Africa’s biggest employers’ group in the metals and engineering industries agreed to offer a 10% pay increase to end strike action. GBPZAR closed down at 18.028, and this morning was trading at 17.995 at 08:00 a.m. in London.
UK News
Yesterday saw the U.K.’s public sector net borrowing requirement come in lower than forecast at £11.4bn in June compared to £11.6bn a year ago. The data released yesterday showed UK Government revenues rose 4.7% whilst spending grew only 3.9%.
UK manufacturing continued to be positive as the CBI industrial survey showed total orders in the 3 months to July increased to 24% while domestic orders increased to 23% and employment went up to 21%.
Today the market will be looking towards the Bank of England as it publishes the minutes of its July Monetary Policy Committee meeting and to Mark Carney’s speech in Glasgow. The MPC minutes might bring some unexpected volatility to the market if a surprise split in the votes is announced.
GBPUSD weakened yesterday and fell to a low of 1.7037 before rebounding and closing marginally down for the day at 1.7055. The pair was trading at 1.7062 at 08:00 a.m. in London.
Sterling strengthened against the euro on the back of weaker euro sentiment. GBPEUR hit a high of 1.2671 and closed the day up at 1.2663. GBPEUR was trading slightly higher at 1.2673 at 08:00 a.m. in London.
