By Alex Hartley of UKForex
British Pound / United States Dollar
US data saw cable higher overnight, but this was short lived.
A fairly quite UK session was seen for the currency pair yesterday. UK services PMI data showed that growth came in below expectation and below economists’ predictions. Having said this, it still showed that the economy is picking up after a slump at the end of last year.
The US session is where we saw the cable advance as both US data releases help easing recent concerns. The non-manufacturing sector grew in February for the 26th consecutive month and US factory order fell less than expected.
GBP/USD reached a Monday high of 1.5880 on the back of this. These gains were also supported with a RBS release believing that MPC policy makers could vote for a rate hike as early as this August. Since the high of 1.5880 for the currency pair we have seen a steady decline and start the day back down at 1.5822.
Both the UK retail sales and this morning’s early house price release not helping the Pound.
– We expect a range today in the GBP/USD rate of 1.5760 to 1.5890
British Pound / Euro
Euro movement mirrors that of GBP/USD. European data continued to weigh on the Euro yesterday as the EZ services economy slid back into a decline after briefly returning to growth in January. An actual figure of 48.80 came in below the set figure of 50.00 for growth. Investor confidence followed and came in 2.8 below the forecast figure. Some light relief was handed to the Euro however as an unexpected rebound after four months of declines in European retail sales went against the grain of what many believed would be another poor release. This along with the US releases (as mentioned above) saw EUR/USD reach a Monday high of 1.3235. This hasn’t maintained overnight though and we sit back down at 1.3178 currently. Sterling traded within a 35 pip range versus the single currency yesterday. The currency pair did break 1.2000 overnight, but we sit at the lower end of yesterdays range at 1.1983 this morning.
– We expect a range today in the GBP/EUR rate of 1.1930 to 1.2040
British Pound / Aussie and Kiwi Dollars
The antipodean currencies continue their declines versus the majors. Gradual losses for AUD/USD and NZD/USD were accelerated overnight after the reserve bank or Australias (RBA) interest rate announcement. The RBA kept interest rates unchanged, but the comments that followed is what triggered the movement as governor Glenn Stevens stated there is scope to cut borrowing costs if demand weakens. This sees AUD/USD fall below 1.0600 this morning and is at 1.0598 currently. NZD/USD is down at 0.8144. Sterling has advances against the Aussie and Kiwi on the back of this and opens at 1.4891 and 1.9378 respectively.
– We expect a range today in the GBP/AUD rate of 1.4750 to 1.4960
– We expect a range today in the GBP/NZD rate of 1.9190 to 1.9450
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