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Follow on Google News | Foreign Exchange News from SendMoneyHome - 21/07/2010SendMoneyHome is the most comprehensive and global money transfer comparison portal. What every your reason for sending money overseas, you will find a quick and easy comparison at sendmoneyhome.org. Here are the foreign exchange news highlights.
By: Stuart May Market introduction by Stuart May TorFX GBPEUR/GBPUSD The Pound has declined heavily against the U.S Dollar in early trading yesterday, dropping almost 1% from a daily high of $1.5309, while the UK currency also traded down towards the lowest level since May 31st versus the Euro. A report from the Office of National Statistics showed that June's budget shortfall narrowed by less-than-expected on the month, reducing the immediate prospect of an increase in UK interest rates. The minutes from the Bank of England's June's policy setting meeting are due for release this morning and investors will be very interested to see if any members joined Andrew Sentance in recommending an increase in borrowing costs. The Office of National Statistics will also release the latest retail sales data for June, which is expected to be robust, with the World Cup in mind and good weather conditions. The Pound rebounded against the Euro last night and closed well above 1.18, as Hungary's smaller-than- EUR/USD The Euro continued to make gains in early trading on Tuesday, pushing towards a fresh 10-week high above $1.3020 against the U.S Dollar, amid reports that showed higher-than- http://www.sendmoneyhome.org/ Currencies Direct This week is all about the euro and the approaching stress test results which will offer much needed feedback on the health of European banks. The euro has experienced a significant turn of fortune from its June 4 and half low against the USD gaining over 10 cents to test the 1.30 level. One reason that the euro has gained is simply that the market was significantly over short in the euro and naturally a lot of these short investors paired their positions leading to a short squeeze higher. Today we have the BoE minutes which should not spring any significant surprises with a 7-1 vote expected- comments from policy members Posen and Sentance will be the highlight and naturally the market will be looking for future objectives from the Monetary Policy Committee. Earlier today we saw GBP/USD fall off a cliff dropping 120 points at 8:00 am before retracing back up within 5 minutes...a crazy move which has been blamed on a Dutch bank- we seem to be getting more of these huge moves in the forex markets- could well be another case of a "fat finger" mistake triggering this move.... http://www.sendmoneyhome.org/ Voltrex - Dollar looks to Bernanke speech for direction - GBP hit as government borrowing figures worse than expected - BOE minutes scheduled for today - Euro stress test results eagerly awaited. US Dollar: Data out of the worlds largest economy has witnessed what can only be described a shocking turnaround of late. It was less than a month ago that markets were pricing in a US rate hike and the economy recovering quickly. A few weeks on and even the FED themselves have stated the path to recovery is a long one and growth may take 5 or 6 years to reach pre crunch levels. Even the spectre of additional stimulus is being discussed in the form of QE2. Pound: Mixed day for the pound yesterday saw GBP drop initially following the release of the government borrowing data. The release showed Public sector net borrowing hit £14.5bn in June, above the £13bn consensus among economists. If the trend continues, the Government will miss its deficit reduction target, raising fresh questions about the country’s ability to control its massive debt burden. Extrapolating this forward points to a full-year deficit of about £152bn, about £3bn above the Office for Budget Responsibility’ Euro: The Euro fell back during mid morning trade yesterday following a 2nd failed attempt to break through 1.30 against the Dollar and also stalled above the 1.17 level against the Pound. The markets are keenly awaiting the release of the European wide stress test on the areas 91 largest banks (UK included) on Friday. https://www.voltrexfx.com/ MoneyCorp - Hungary pays for its hubris - MPC minutes this morning On the credit side: Ireland, Spain and Greece conducted successful debt auctions and Italian industrial orders increase by a healthy 3.2% in May. French economy minister Christine Lagarde said she was 'confident' about the results of the stress tests on 91 Euroland banks; the results are due out on Friday. On the debit side: Borrowing three-month money at over four percent because nobody will let them have it for any longer hardly qualifies as unmitigated triumph for Greece. Hungary was able to fill only three quarters of an already paltry (€120 million equivalent) three-month bill auction; it was the second such failure in two months. With only two days to go before publication of the European bank stress tests, investors could see no compelling reason to increase their euro holdings. Nobody knows how the market will react to the results. They can be fairly sure that most, if not all of the banks will have passed. But they have no idea whether the consensus reaction will be one of joy that the banks are so strong or despair that the tests were obviously not tough enough. For many operators that uncertainty alone will have been enough to persuade them that a little position housekeeping was in order. http://www.sendmoneyhome.org/ # # # SendMoneyHome is the most comprehensive and global money transfer comparison portal. What every your reason for sending money overseas, you will find a quick and easy comparison at sendmoneyhome.org. Here is today’s foreign exchange news highlights. End
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