Pound sees losses against dollar and euro

Published on in Currency Exchange News by

The pound had a torrid time yesterday losing gains against both euro and US dollar. Sterling is still struggling after the dovish remarks of Bank of England policymaker Adam Posen. The weak mortgage approvals rates suggest that the economy is not recovering as strong as expected and momentum is slowing down. These numbers were not very inspiring and there seems to be a certain amount of restraint in Sterling pushing up to $1.60.

 The GBP/USD pair according to Peter Rosentreich, Technical Analyst at Advanced Currency Market is moving sideways and will maintain trading in this range until we see a clear break through with an aim at reaching the 10th August high of 1.5910. With the key factor level being the barrier of 1.6000. But with fears of monetary easing from the Fed the dollar looks like it will struggle to strengthen.

 The ever buoyant euro rose to a four month high against the pound, GBPEUR fell to €1.1590 a move of more than 0.3% for the day. This is mainly due to speculation that the Bank of England are talking of Quantitative Easing which weakened Sterling against the euro. Also the Eurozone received a better than forecast rate in the Business Climate indicator, the rate was expected to be 0.58 but came out 0.77 which suggest the economy is strengthening in the Eurozone mainly due to good German manufacturing data in previous weeks.

 Following on from the USD weakness we saw a surge in base metal trading yesterday as the LME reported that many metals were breaking multi-month highs due to general buying being prompted by the battering of the dollar. Copper was the main leader of the pack breaking above $8,000 for the first time in almost half a year. This is good news for the Aussie dollar as it is one of the world’s largest exporters of base metal especially copper.

 The Bank of Japan will release information on the amount of US dollars they bought in an attempt to weaken the yen tomorrow, this is amid speculation that they will continue to try and weaken their own currency in an attempt to boost exports.

 In other news we see the Swedish krona appreciate against US dollar, euro and sterling, due to a stronger than predicted consumer confidence index of 28.4 compared to a predict rate of 24.  

 Finally, Brazilian Finance Minster Guido Manteg has warned of a “currency war” and says his government will buy any excess dollars in a bid to curb the Real’s appreciation.

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