British Pound Sterling | Currency News Views and Outlook
British pound sterling: Currency finally finds relief against the USD, but status quo against EUR continues
- Category: British Pound Sterling
- Published on Wednesday, 06 June 2012 09:23
- Written by Sam Coventry
"The market will be very focused on what the European Central Bank will do to address the region’s debt and growth issues today" - Richard Driver at Caxton FX.
The pound sterling (Currency:GBP) has made some welcome advances against the US dollar in recent currency market trading, this as the USD is sold-off in line with more positive investor sentiment.
The pound euro exchange rate is 0.06 pct higher at 1.2363. (Please see the latest FX forecasts from those institutions we follow on our IMT site, access is Free via this Facebook entrance page).
The pound dollar exchange rate is 0.5 pct higher at 1.5459.
The pound Australian dollar exchange rate is 0.67 pct lower at 1.5688.
"The market will be very focused on what the European Central Bank will do to address the region’s debt and growth issues today. A 0.25% interest rate cut would be a good start, but many market players will be crossing their fingers for the ECB to resume purchasing peripheral government debt or for indications of a further cheap loan offering," says Richard Driver at Caxton FX.
On the economic front we note currency markets largely ignored the release of the Markit/CIPS Construction Purchasing Managers' Index (PMI) which fell to 54.4 from 55.8 in April.
Forecasts had expected a fall to 54.2.
"Tomorrow’s UK services sector figure will, as ever, provide a little more direction. This pair is trading at €1.2350 this morning but we suspect the ECB will refuse to deliver any measures today, which could hurt the euro," says Driver.
As mentioned, the pound has bounced off its near two-year lows against the US dollar (Currency:USD) in line with the broader risk-friendly theme on the markets.
"There has been further talk of QE3 from the Fed, but we still think US conditions have to deteriorate a fair bit further for the trigger to be pulled. Sterling is trading at $1.5450 and we suspect this bounce will prove temporary before levels below $1.50 are seen later on in Q3," says Driver.