Forex: Sterling jumps to 1.5643 USD

on Jun 11, 2013


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The pair has been trading one pip away from the 1.33 level today, before retracing to 1.3232 on US data updates released during the European afternoon session.
Among these updates, the Business Optimism index issued by the National Federation of Independent Business has shown an increase to 94.4 in May, beating estimates of 93.4 and bettering April’s 92.1.

The weekly update on Redbook Index, which measures store sales growth, has shown a decline to – 0.5 percent on a monthly basis and an annualized increase to 2.8 percent in the week ended on June 2, against previous prints at 0.6 percent and 2.9 percent, respectively.
The downside correction of the pair hasn’t lasted long and the quote has returned to 1.3276/78 in European afternoon trading.

Upcoming updates tomorrow will include German Consumer Price Index, to be followed by Eurozone industrial production and weekly US mortgage applications report.
During the Asian session the Bank of Japan decided to keep monetary policy unchanged and to hold its interest rate at 0.1 percent, declining to implement measures to ease volatility in the government bond market, which was disappointing for traders.

BOJ officials have said Japan’s economic health is improving, with GDP expanding by an annualized 4.1 percent in the first quarter, up from a preliminary reading of 3.5 percent and the one percent growth recorded in the last quarter of 2012.
The updates have reduced yesterday’s US dollar’s gains against the yen, with the pair hitting lows at 96.46 in early European trade today.

Since then, the quote has risen to 97.29, before retreating again into the 96.90 zone. So far, these low levels have stayed stable with the pair trading around the 0.97 barrier.
The May value of Domestic Corporate Goods Price Index will be released by the Bank of Japan minutes before 01:00 BST on Wednesday, together with the April machinery orders.
The Royal Institution of Chartered Surveyors (RICS) survey on the UK Housing Price Balance was released shortly after midnight BST today. It showed a five percent increase for May, against an increase of one percent for April and expectations for a three percent growth.
This helped the British currency to advance against the US dollar and to hit highs again today.
Sterling hit a high of 1.5602 in late Asian trading before retreating in European trading.
The UK National Institute of Economic and Social Research published a GDP estimate for the three months to end-May, showing an increase of 0.6 percent, following 0.8 percent growth during the previous three months.
Following this data release, the pair has risen sharply and at the time of writing stands at 1.5647.
Tomorrow, the UK National Statistics Office is expected to release an update on the number of unemployed for May with expectations for better than previous results.
Since the Swiss State Secretariat for Economic Affairs released its growth forecasts for 2013 before the European opening today, the pair has fallen from 0.9350 to 0.9259 in early European trade.
The GDP forecast was raised to 1.4 percent from 1.3 percent previously.
After the US Business Optimism index was updated ahead of the American session, USD/CHF quote rose to 0.9308 as USD received some strength from the positive data. The index increased to 94.4 in May, beating estimates of 93.4 and bettering April’s 92.1.
The Redbook Index, released one hour later came in disappointing to – 0.5 percent decline on a monthly basis. This news took away the momentum for the US dollar, despite the increase on annualized basis to 2.8 percent in the week ended on June 2.
Following this release, the pair has fallen to new lows at 0.9223 in European afternoon trading.
The AUD/USD quote has fallen to record lows at 0.9325 in European trade today.
The Australian currency has been pressured by data indicating worsening economic conditions in the country.
According to the Australian Bureau of Statistics, the value of home loans declined to 0.8 percent monthly growth in April, above expectations for a two percent growth but below the prior reading of 4.8 percent. Investment lending for homes also declined in April, showing 1.1 percent growth, against 2.1 percent rise in March.
The National Bank of Australia Business Confidence Survey came out slightly improved, with a reading of -1 point for May versus -2 in April, and business conditions were reported to have improved to -4 from -6 points for the previous period.
A report by Goldman Sachs, also released today, has confirmed the downbeat outlook for the Australian dollar. According to the report, Australia’s economy will grow by two percent this year, well below the previously forecasted 2.4 percent growth. Goldman has also forecast 1.9 percent growth in 2014, below the bank’s earlier estimate of growth of 2.7 percent. The 12-month forecast on the AUD/USD has been lowered to a target at 0.8500, down from the previous 0.9000.
Since the start of the American session and following the release of the latest US updates on business optimism and store sales, the pair has started a recovery to 0.9410.
The quote has settled around the 0.94 level in American mid-day trading.
The US dollar was changing hands higher against its Canadian counterpart in early European trade today.
Ahead of the European bell this morning, the quote started a long march from lows at 1.0176 to daily highs at 1.0252. The upward move was interrupted by the US releases on business optimism and store sales, which pushed the pair all the way down to its daily lows at 1.0176 again.
In American mid-day, the USD/CAD quote has settled around 1.0180 with continuing bearish signals.


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