US ($) Currency Thread 2

inspector_monkfish

1.6435 trading

inspector_monkfish

10:52 21Jul09 Sterling falls vs dollar as UK public finances weigh

* Sterling hits session low of $1.6400 <GBP=>
* Pound lower after hitting 3-week high vs dlr on Monday
* Public finances better than expected but record June gap

LONDON, July 21 - Sterling fell against the dollar on Tuesday after hitting a three-week high the previous day while the pound was also lower against the euro as deteriorating UK public finances weighed.

Both measures of Britain's public borrowing came in below forecast in June, data showed on Tuesday, though they still recorded their highest deficits for a month of June on record.


The public sector posted a net cash requirement of 18.980 billion pounds in June, slightly lower than the 20 billion pounds expected by analysts but a record high for the month.

The government's preferred accruals-based measure, public sector net borrowing, came in at 13.002 billion pounds, lower than the 15.5 billion pounds forecast but also a June record.

"June's UK public finances figures are a touch better than expected, but do absolutely nothing to alter the big picture that they are in a dreadful state," said Vicky Redwood, UK economist at Capital Economics.

Public finances remain on a sharply deteriorating path. In the April to June period, public sector net borrowing stood at 41.180 billion pounds, nearly double the level in the same period a year ago.
The government has forecast borrowing for the full year of 175 billion pounds, a record post-war high.

"The market is focused on longer-term fiscal issues for sterling, and if you do the math, it doesn't look comforting," said Phyllis Papadavid, currency strategist with Societe Generale. "We could end up with a twin (budget and current account) deficit situation in the UK."

By 0945 GMT, sterling was down 0.7 percent at $1.6427 <GBP=D4>, after hitting a session low of $1.6400. It had risen to $1.6555 on Monday, its highest since late June but was still far off a high of $1.6745 in that month.

The euro was up 0.6 percent at 86.52 pence <EURGBP=>, breaking above initial resistance around 86.40 pence. Traders cited stops from 86.60 pence upwards but others said there was little technical momentum to push it higher.

The head of Britain's Debt Management Office (DMO) told BBC radio on Tuesday he saw healthy appetite in international markets for UK government debt and it would take more than one sovereign rating downgrade to dampen it.

Asked if the debt office's ability to sell gilts would be threatened by any downgrade to Britain's AAA sovereign rating, DMO head Robert Stheeman said this was not a major worry.

"Ultimately it could affect the price at which we are selling gilts .... but my sense is that for overseas investors to be seriously concerned you would have to see not just one but possibly several downgrades," he said. [ID:nLAL002283]
An auction of 4.0 billion pounds of 4.00 pct conventional gilts met a decent response, with a cover ratio of 1.7 times. [ID:nLAC003384]

The dollar came off six-week lows against a basket of currencies <.DXY> after U.S. Federal Reserve Chairman Ben Bernanke discussed exit strategies in a Wall Street Journal opinion piece, but also indicated rates would not rise soon.
Bernanke kicks off his semi-annual congressional testimony at 1400 GMT.

"We could see the riskier currencies outperform at the expense of the dollar," SocGen's Papadavid said. "The market is looking to him (Bernanke) for a bit of optimism about the run in equity markets, although the jury is still out on that."

inspector_monkfish

1.6480 trading

xinran

Does anyone know:
If I use my Nationwide Visa card to purchase something in US$ any time today, will I get $1.65:£1 as indicated here http://corporate.visa.com/pd/consumer_services/consumer_ex_results.jsp?from=GBP&to=USD&rate=0.0
regardless of the fluctuations throughout the day. i.e.if the rate finishes below $1.65, will I still get the indicated rate?

Many thanks

nomad1972

I was in the US during the last rate rise a month or so ago and was checking the VISA rate most days.

Even if the VISA rate was showing 1.65 or 1.64, it was appearing on my Nationwide VISA statement (even the following day) at 1.62 or lower.

Nationwide pass on the VISA charge too as you probably already know... is it 0.8% ?

Steve

inspector_monkfish

1.6410 trading at end of day...

sabretoothtigger

dollar index is rising since market open and gbp is losing ground as money goes back to the yen it seems

It could be just a small pullback but I think its a reasonable point to cash in gains if you are going on holiday any time soon


usdjpy below 9320 would confirm that to me as that would break the 15th's low

neilbond007

sabretoothtigger wrote: »

dollar index is rising since market open and gbp is losing ground as money goes back to the yen it seems

It could be just a small pullback but I think its a reasonable point to cash in gains if you are going on holiday any time soon


usdjpy below 9320 would confirm that to me as that would break the 15th's low

Blimey. That's a bit high level for the people that reside on this thread

House is closing next Tuesday! The party is on people

inspector_monkfish

down at 1.6340 this morning

inspector_monkfish

08:16 22Jul09 EUR/GBP: Market Bid As GBP under Pressure, Bank of England's Bean Talks

EUR/GBP continues gains from recovery from the potential .8592 (Monday"s
low), with the overall focus on .8699 (July 13 spike high). Note that overall
range today has been .8646-.8690 (<TGM2371>), while the lowest seen in Europe has been .8656. Be aware that there is a 100mn EUR/GBP .8700 option strike set to expire on July 29 (next week Wednesday <TGM2370>), so as this date approaches the chances increase of prices being drawn here. Despite this, should the EUR unit continue to outpace GBP, then we should see an extension towards the 200- day moving average (.8795).

In terms of data, July CBI trends data (Reuters survey shows a market
expectation of -45.00). Note that BoE Bean has stated that the economy must be rectified fiscally, once the recovery is underway which at present shows no signs of occurring. In terms of inflation his expectations are for further falls in
inflation, this has put GBP under pressure.