B
BenjaminFX
New Member
Wednesday 6th April 2011
Traders are expecting a surge of volatility between the majors, Sterling, Euro and US Dollar over the next two days as the three respective central banks experience ‘Big Data’ days on Wednesday and Thursday.
GBP
The UK starts off Wednesday with the Halifax House Prices for the month of March, followed in quick succession by the Industrial and Manufacturing Production numbers at 09:30.
These numbers, if on target or better than predicted, should see Sterling strengthen against the US Dollar as the pair are currently trading at a 14 day low.
The larger shift should follow Thursdays Monetary Policy Committees Interest Rate decision at 11:00. Widely expected to continue with asset purchase plans to the tune of £200 billion, traders will be looking for any sentiment or shift in the voting for hikes from the 0.5 percent rate of interest.
EUR
The Euro could see a short term upward movement against GBP and USD as the Gross Domestic Product figures (YoY and QoQ) are published this morning.
The GDP is by far the most influential driving force of any economy as it measures the total value of goods and services produced. As the most comprehensive highlight of output for the Euro Zone nations the markets have a tendency to move on its release.
Following on from this will be Thursday’s highly anticipated Interest Rate decision at 12:45. This publication has, to my mind, carried the most speculative trading we have seen this year.
Approximately 80 percent of traders expect the European Central Bank to increase rates from 1 percent this month, which has been priced into the market since late Sunday evening.
We have seen some retracement from Sterling against the Euro however I believe if the ECB hikes the Euro zone cost of borrowing then we will see EUR/GBP gain 1 to 2 cents before sliding back to its previous levels witnessed in March.
USD
Against its major rivals, GBP and EUR, the Greenback has very little data to be published this week and by default this could see a short term wave of US Dollar weakness against both.
However, coming to its aid will be today’s speech from Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, who last week made rather hawkish comments regarding the plans to continue with the purchase of a further $200 billion of Treasury bonds.
Mr Lockhart’s views highlighted a gradual gain in terms of growth for the US economy and questioned the need to review the Fed’s austerity measures. As he is not part of the decision making panel he seems to have thrown this topic out for media debate.
This move could have more influence then anticipated on the central bank if the American public use their consumer power to persuade the Fed to reassess.
Foreign Exchange Rates Table
Currency Pairs Current Mid-Rates at 9.00am
GBP - EUR 1.1385
EUR - GPB 0.8782
GBP - USD 1.6269
EUR - USD 1.4289
GBP - AUD 1.5672
GBP - CAD 1.5643
GBP - NZD 2.0998
GBP - CHF 1.4922
GBP - HKD 12.6473
GBP - NOK 8.8688
GBP - SEK 10.2694
GBP - ZAR 10.2694
GBP - THB 49.0916
GBP - AED 5.9758
GBP - MAD 12.8630
GBP - ILS 5.6282
GBP - TRY 2.4799
GBP - JPY 138.154
These are indicative rates, not buy rates
Traders are expecting a surge of volatility between the majors, Sterling, Euro and US Dollar over the next two days as the three respective central banks experience ‘Big Data’ days on Wednesday and Thursday.
GBP
The UK starts off Wednesday with the Halifax House Prices for the month of March, followed in quick succession by the Industrial and Manufacturing Production numbers at 09:30.
These numbers, if on target or better than predicted, should see Sterling strengthen against the US Dollar as the pair are currently trading at a 14 day low.
The larger shift should follow Thursdays Monetary Policy Committees Interest Rate decision at 11:00. Widely expected to continue with asset purchase plans to the tune of £200 billion, traders will be looking for any sentiment or shift in the voting for hikes from the 0.5 percent rate of interest.
EUR
The Euro could see a short term upward movement against GBP and USD as the Gross Domestic Product figures (YoY and QoQ) are published this morning.
The GDP is by far the most influential driving force of any economy as it measures the total value of goods and services produced. As the most comprehensive highlight of output for the Euro Zone nations the markets have a tendency to move on its release.
Following on from this will be Thursday’s highly anticipated Interest Rate decision at 12:45. This publication has, to my mind, carried the most speculative trading we have seen this year.
Approximately 80 percent of traders expect the European Central Bank to increase rates from 1 percent this month, which has been priced into the market since late Sunday evening.
We have seen some retracement from Sterling against the Euro however I believe if the ECB hikes the Euro zone cost of borrowing then we will see EUR/GBP gain 1 to 2 cents before sliding back to its previous levels witnessed in March.
USD
Against its major rivals, GBP and EUR, the Greenback has very little data to be published this week and by default this could see a short term wave of US Dollar weakness against both.
However, coming to its aid will be today’s speech from Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, who last week made rather hawkish comments regarding the plans to continue with the purchase of a further $200 billion of Treasury bonds.
Mr Lockhart’s views highlighted a gradual gain in terms of growth for the US economy and questioned the need to review the Fed’s austerity measures. As he is not part of the decision making panel he seems to have thrown this topic out for media debate.
This move could have more influence then anticipated on the central bank if the American public use their consumer power to persuade the Fed to reassess.
Foreign Exchange Rates Table
Currency Pairs Current Mid-Rates at 9.00am
GBP - EUR 1.1385
EUR - GPB 0.8782
GBP - USD 1.6269
EUR - USD 1.4289
GBP - AUD 1.5672
GBP - CAD 1.5643
GBP - NZD 2.0998
GBP - CHF 1.4922
GBP - HKD 12.6473
GBP - NOK 8.8688
GBP - SEK 10.2694
GBP - ZAR 10.2694
GBP - THB 49.0916
GBP - AED 5.9758
GBP - MAD 12.8630
GBP - ILS 5.6282
GBP - TRY 2.4799
GBP - JPY 138.154
These are indicative rates, not buy rates
