July, 2009
Foreign Exchange - UK Daily Update - Friday, July 31, 2009 7:30 - 0 Comments
World First Foreign Exchange 31/07/09 Update: Equity Markets Fight Back
The world has become a more resilient place in the past few months. In Q4 of last year or Q1 of the current news that Chinese shares had lost over 5% in the course of a trading session would have had seen investors cowering and a worldwide pandemic of fear to accompany the current swine flu problems.
Yesterday however was better as every major global index from Tokyo to Mexico City were in the green and the riskier currencies of this world (AUD, NZD, GBP, ZAR & CAD) enjoyed a strong day. GBP/EUR continued to extend its breakout from its recent downtrend hitting a peak of 1.1760 yesterday, a 4 week high. GBP/USD was also higher but has been kept in check by technical levels surrounding 1.65; data today could give us another run at higher.
The euro on the other hand cannot wait for this week to be over following more poor data yesterday. German unemployment rose by 30,000 jobs although the jobless rate stayed at 8.3%. This combined with the prospects of poor Europe wide jobs and inflation data today has kept the single currency on the back foot in recent sessions.
Sterling on the other hand was helped along by the news that house prices have risen for the 3rd month in a row. The Nationwide building society told the markets yesterday that house prices had risen by 1.3% in the months of June and that there is a ‘reasonable chance’ that prices will be higher at the end of 2009 than when we started it.
The only piece of data from the UK today has already been released as GFK Consumer Confidence held steady at -25; a jump to -23 was expected but sterling is little changed overnight. We’ll therefore have to rely on others’ weakness for sterling moves higher. Data from Europe today includes the aforementioned jobs and inflation readings however their negative expectations may have accounted for yesterday’s weakness; they are due at 10.00. We also have GDP, Inflation and Manufacturing PMI from the US.
Have a good weekend.
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