Investors choose Sterling as a safe currency bet

Published on in Foreign Exchange News by

Foreign Exchange Overnight/Morning Ranges:

Currency Rates EUR/USD 1.4347-1.4394

Currency Rates GBP/USD 1.6462-1.6509

Currency Rates GBP/EUR 1.1458-1.1498

Investors choose sterling over the euro and US dollar currency based on concerns over the sovereign debt crisis, this has caused the pound Sterling to hit a 3 ½ month high against the US dollar on Friday. Sterling also gained support from data that showed the UK government’s public finances posted a surplus in July, putting the government on track to meet its deficit reduction plan.

The focus has shifted away from the UK for now as investors look much more closely at the USA and euro zone, but that does not mean the UK is performing well. Simply that it is the ‘least worst’ out of the three. Out this week there is consumer confidence data and revised 2nd quarter GDP data on Friday. Call in now for a live exchange rate.

German Chancellor Angela Merkel confirmed her negative view on Euro Zone bonds in a television interview yesterday. Nothings new really but it also means that markets continue to be uncertain about what will happen if the ECB no longer caps the yields of Italian and Spanish government bonds at levels around 5%.

Markets also remain divided over the next move for the Euro. Weaker global economic forecasts have seen stock markets tumble over the last week which has resulted in gold rallying and commodity currencies losing some of their long term strength.

The USD if anything a little weaker today versus Europe, as market awaits any hints of Q/E 3 from Bernanke in the coming weeks. Sterling is also a little weaker versus the Euro and looking range bound.

 

EUR/USD currently 1.4482. Support 1.4200, resistance 1.4500.

GBP/USD currently 1.6481. Support 1.6300, resistance 1.6600.

GBP/EUR currently 1.1460. Support 1.1350, resistance 1.1600.

 

 

Today’s Data

11.00 EU Bundesbank Monthly report published

 

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