Forex Focus
EUR/USD Performance Chart (06/09/10 12:00)
| Daily % Chg |
-0.08% |
|
3 months |
7.63% |
| 1 week |
1.76% |
|
6 months |
-5.49% |
| 1 month |
-2.30% |
|
1 year |
-9.58%
|
Details
| Prev close |
1.2896 |
|
|
52 week high |
1.5144 |
| Last trade |
1.2886 |
|
|
52 week low |
1.1877 |
| High |
1.2919 |
|
|
Low |
1.2872 |
Bloomberg Median Forecasts
| Q1 2010 |
1.39 |
|
Q3 2010 |
1.25 |
| Q2 2010 |
1.25 |
|
Q4 2010 |
1.25 |
|
|
|
Commentary
The euro pared earlier gains against the US dollar after a report showed European investor confidence slipping in September. The Sentix Investor Confidence index unexpectedly dropped to 7.6 in September from 8.5 the previous month. A Bloomberg survey of economists forecasted that the gauge would increase to 9. The drop in investor confidence took some of the shine off of last week's better-than-expected US jobs data, which was still a major factor driving equity market sentiment this morning. As a result, EUR/USD pared earlier gains to trade near its previous close at $1.2887. With the US market closed today for Labor Day, the euro will be taking its cues from European equity markets, which is likely to hold onto this morning's gains in the absence of any significant economic data due for release today. The German factory orders, scheduled for release tomorrow, will be the next major economic gauge to watch out for. David Choe, London
GBP/USD Performance Chart (06/09/10 12:00)
| Daily % Chg |
-0.60% |
|
3 months |
6.16% |
| 1 week |
-0.67% |
|
6 months |
1.94% |
| 1 month |
-3.38% |
|
1 year |
-5.88%
|
Details
| Prev close |
1.5452 |
|
|
52 week high |
1.6878
|
| Last trade |
1.5359 |
|
|
52 week low |
1.4231
|
| High |
1.5490 |
|
|
Low |
1.5356 |
Bloomberg Median Forecasts
| Q1 2010 |
1.60 |
|
Q3 2010 |
1.52 |
| Q2 2010 |
1.47 |
|
Q4 2010 |
1.52 |
|
|
|
Commentary
Sterling encountered a sharp sell-off this morning, as poor economic data released in the UK last week took its toll on European investors. GBP/USD was trading at 1.5489 shortly after European equity markets opened this morning, but proceeded to lose 100 pips to 1.5381 by 10am (London time). Cracks began to appear in the UK economy after a series of weak PMI surveys pointed to a tepid recovery. The sell-off in sterling this morning came despite a report that showed manufacturing expanding at a record pace in the third quarter. The Engineering Employers Federation (EEF) and BDO survey showed manufacturing output and new order balances jumping by 33% and 35% respectively in the third quarter, the largest expansion since the survey began in 1995. The growth does come off a low base and investors may have discounted the report on the longer term view that fiscal austerity in the UK will end up hurting the domestic economy. David Choe, London
AUD/USD Performance Chart (06/09/10 12:00)
| Daily % Chg |
-0.05% |
|
3 months |
10.67% |
| 1 week |
2.72% |
|
6 months |
0.76% |
| 1 month |
0.00% |
|
1 year |
9.02% |
|
Details
| Prev close |
0.9166 |
|
|
52 week high |
0.9406 |
| Last trade |
0.9161 |
|
|
52 week low |
0.8067 |
| High |
0.9178 |
|
|
Low |
0.9138 |
Bloomberg Median Forecasts
| Q1 2010 |
0.90 |
|
Q3 2010 |
0.88 |
| Q2 2010 |
0.90 |
|
Q4 2010 |
0.88
|
|
|
|
Commentary
AUD/USD was little changed ahead of the Reserve Bank of Australia (RBA) interest rate decision tomorrow. The consensus view is that the central bank will keep interest rates on hold at 4.25%, as uncertainty over the health of the global economy is likely to encourage the central bank to adopt a wait-and-see approach. Over the weekend TD Securities released their inflation report, which showed year-on-year inflation rate of 3% in August, right on par with the upper comfort range for the RBA. Manufacturing output in China has also improved, which supports growth for the Australian economy. There are also preliminary signs that the US economy is improving, which could revive global growth. However, with only one week of upbeat economic data it is clearly too early to say that conditions will continue to improve. Considering these factors, the growth prospects for the Australian economy still looks very healthy and investors will be expecting a hawkish tone on the economic outlook from the RBA. David Choe, London
Notes: Chart data sourced from Bloomberg. Bloomberg Median Forecasts are produced by Bloomberg by taking the median level from rates forecast by a number of contributors. These contributors consist of leading banks and security firms.
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