The pound continued to advance against a broadly weaker single currency yesterday, hitting a six-week high of 1.1167 as investors trimmed their euro holdings.Preliminary CPI data from Germany revealed that consumer prices remained flat on the year in October. Monthly data showed that the index did rise by 0.1% in October from September, though this rise failed to garner support for the euro.The markets also saw a slight withdrawal of risk activity yesterday as weak housing data in the US renewed concern over the health of the global recovery.The data dragged European equities down to three-week lows, which appeared to impact more severely on the single-currency, enabling the pound to gain.This morning, the pound is consolidating its position above 1.1100, with analysts reiterating that sterling is likely to remain in a holding pattern until next week’s BoE asset purchase decision.Investors are cautious amid uncertainty over whether the Central Bank will extend their quantitative easing programme, and so sterling movements may continue to be dictated by risk appetite in over the coming days.
Posts Tagged ‘Risk Appetite’
Falling global equities enabled the pound to post gains against the euro
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Mizuho expects weakening the Japanese currency
The Japanese yen fell to a two-month low against the single European currency against the backdrop of growth in the stock markets, triggered by good data on the earnings of the companies – this is yet another sign of reviving the global economy boosted demand for higher-yielding currencies. As the currency analysts Mizuho, interest risk, in general, increases, and this is the explanation for weakening the Japanese currency. In a situation of increasing “risk appetite”, subject to the overall growth in the commodity and stock markets, the yen will remain under pressure.
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Euro managed to push through $1.50, but has slipped this morning following mildy disappointing Chinese data
The single currency resumed its upward march against the greenback yesterday, finally broaching the 1.50 mark, to close up half a cent at 1.5015. In early trading, the euro retreated from near 14-month highs as some investors bet European policy makers would say they are still concerned that the euro’s strength will harm the economic recovery. Analysts also said that the single currency’s sharp fall against the pound weighed on the euro/dollar price, which has recently remained anchored just below the $1.50 level. However, the dollar relinquished its gains in the afternoon as rising U.S.
The pound is gaining against the aussie as risk appetite briefly dulls and sterling demand picks up
The pound posted gains against the aussie dollar yesterday as risk appetite waned slightly with weak data emerging from the US and equities slipping back. The US PPI unexpectedly decreased by 0.6% in September, disappointing expectations of a 0.1% rise, which raised concern over the strength of the US recovery. Data from the US housing market also fell below market forecasts, dulling investor appetite to buy into perceived “riskier” assets, weakening demand for the aussie. Sterling’s advance was relatively steady though, with the price rising less than 0.4%, as the broad strength of the Australian currency prevented traders from selling their investments in any great number.
Lower equites, dulled risk appetite yesterday enabling the US dollar to post gains against the euro
The single currency slipped back from a fresh 14-month high against the dollar following further comments from the ECB that expressed apprehension over the euro’s strength. In early trading, options buying once again prevented the euro from pushing through the psychologically important $1.50 level, posting a high of $1.4993. The single currency was supported after further positive corporate earnings weighed on haven demand for the dollar, emboldening investors to sell the low-yielding US unit to fund the purchase of riskier, higher-yielding assets elsewhere. However the euro fell back as the ECB repeated their support for the US Treasury’s self-professed strong-dollar policy, and expressed concerns over recent “volatile” trends in the market and the strength of the single currency In the afternoon Wall street slipped as tame US inflation data offset strong quarterly earnings from Apple, denting investor appetite to sell the low-yield dollar. The economic data, which showed that the US PPI unexpectedly dropped by 0.6% last month, disappointed market expectations and helped the greenback recover earlier losses, though analysts said that it would remain under pressure as long as stocks continued to show an upward trend.
Sterling edged down against the dollar yesterday, but is currently trading back over 1.65 this morning
Sterling capped its five-day upward trend against the dollar, falling back from a one-month high of $1.6487 as weak economic data supported the haven currency. In early trading, sterling held steady against the dollar after UK public finances showed a weak figure but better than market expectations, which offset the negative impact of news that Qatar are selling a significant stake in Barclays bank. Data showed a deficit reading of £14.8 billion bringing Britain’s public spending to its worst six months on record, however, the data was better than forecasts, which analysts said boosted sterling’s gains.
Pound reached over $1.64 yesterday, but has slipped half a cent in trading this morning
Having traded in the red during the morning session, the pound rebounded back over $1.64, climbing for the fifth consecutive day and reaching a near one-month high of $1.6422. The pound initially fell against the dollar, relinquishing last week’s gains after the Sunday Times said Bank of England policy maker Adam Posen may support an extension of the central bank’s asset-purchase programme. Posen added that he was “not worried about overshooting inflation right now,” which many analysts have said will become an issue as the economy begins to grow. Last week, following the words of Mr Fisher, the market moved to discount a scenario where it was more likely that asset purchases would be paused.
Pound is rallying against the kiwi dollar as investors book profits ahead of the weekend
The pound achieved a ten-day high against the kiwi yesterday, as bullish comments combined with profit taking to bring the UK currency off multi-month lows. The UK currency was buoyed by comments that quantitative easing is in fact having its desired effect and that the MPC may not need to extend QE in their next meeting as many has speculated they would. The news triggered a wave of profit taking, pushing the sterling/kiwi price up two and half cents on the day to close at 2.1849. There was positive news from the US yesterday in the form of corporate earnings, in particular, Goldman Sachs and Citigroup, but the rise in risk appetite failed to assist the higher-yielding currency as investors chose instead to lock in profits. The pound has extended its climb in trading this morning, currently edging back over 2.19 as investors continue to profits ahead of the weekend.
Bearish sentiment towards the pound prevailed yesterday, but the sterling is rallying strongly against the euro today
The pound relinquished early gains against the single currency, closing marginally down at 1.0704 as rising risk appetite benefited the euro. Sterling initially rose against the single currency yesterday after data showed a smaller than expected rise in the number of UK jobless claiming benefits, and the overall unemployment rate unexpectedly held at 7.9%. This data prompted investors to further pare back some of the heavy bets built up against sterling in recent weeks, which have pushed the price to multi-month lows. In addition, some analysts have said that speculation over an extension of quantitative easing could be overdone, and that the pound / euro price could have correction potential.
The single currency is pushing up towards 1.49 against the dollar as risk appetite firms
The single currency reached a 14-month high of 1.4874 against the greenback yesterday, advancing over a cent, as investors refocused on the outlook for US interest rates.In early trading, the single currency suffered a setback as the German ZEW Economic Sentiment index dropped to 56.0 from 57.7 in September, its first fall in three months. However, the dip provided a good buying opportunity for a market that remains broadly bearish on the dollar, allowing the euro to push higher. Analysts also noted that the weakness of the dollar was due in part to comments from a Japanese Ministry of Finance official, which reiterated the recent stance to accept the onging strength of the yen.
Strong commodity prices and doubts over the UK economy allow the aussie to gain further ground
The Australian dollar continued to push higher yesterday, advancing over a cent as sentiment towards the higher-yielding currency remained positive. Commodity currencies, such as the aussie, made progress yesterday in line with stronger prices for oil and metals. Rallying global equity and commodity markets encouraged the rise in risk appetite in the market, which heightened demand for the aussie dollar. In the UK, the market still holds the view that further quantitative easing could be announced in November, which has put substantial pressure on the UK currency as other major economies look to wind up stimulus measures.
Euro posts gains against the US dollar as risk appetite ushers investors into high-yielding currencies
The single currency recovered some of the losses it incurred on Friday, gaining over half a cent against the greenback as risk appetite in the market strengthened.Rallying equities yesterday, which have been boosted by stronger commodity prices and optimism about the US corporate earnings season, also buoyed support for the euro, allowing it to briefly trade over 1.48. Analysts also noted that while in other nations future policy remains hazy, the single currency benefited from a clearer outlook for monetary policy in the eurozone. Additionally, comments from the president of the St Louis Federal Reserve that the US economy faced risks from rising inflation, stoked speculation that US interest rates might rise sooner than had been expected, but investors remained bold in their exposure to risk, continuing to sell the dollar.
Demand for the kiwi remained strong yesterday, but it has lost ground in the wake of comments from Ben Bernanke
The pound edged down against the kiwi as rising risk appetite in the market offset the BoE’s decision to hold their monetary policy unchanged. Investors continued to buy into the higher-yielding New Zealand dollar, encouraged by rallying global equity markets and a broadly weaker dollar.In the UK, the BoE kept interest rates at 0.5% and decided against extending the quantitative easing programme as some had feared.However, the decision only gave the pound a muted boost against the kiwi, as investors had already priced the news into the market.In trading this morning, the kiwi has trimmed its gains as investors lock in some profits and as comments from the Fed Chairman suggested that the US may need to tighten monetary policy, spurring a slight return to the US dollar.However analysts have noted that overall market sentiment towards the kiwi is still pretty bullish, and that any upward movement for the pound is likely to be as a result of profit taking, rather than decreasing demand for kiwi assets.
The aussie continues to trade strongly, supported by risk appetite in the market
The aussie climbed a further two cents yesterday as figures revealed rising employment in Australia, and as rising risk appetite supported strong demand for high yielding currencies. The Australian dollar continued to push higher as encouraging data from the labour market gave investors further cause to buy into Australian assets. The recent rate hike to 3.25% has increased the yield gap between the two currencies, and the recent downturn in unemployment has simply reinforced the sentiment that Australia is at the forefront of the global economic recovery, strengthening aussie demand.
Euro advanced against the greenback, buoyed by a relatively upbeat ECB rate statement
The single currency climbed to a two week high of 1.4815 yesterday as investors continued to sell the dollar to fund riskier trades. The single currency returned to its recent upward trend, initially climbing half a percent, as investors took up dollar selling in the wake of further evidence of global economic recovery. Australian employment data revealed a rise in jobs in September, reinforcing risk appetite and triggering broad dollar selling as its haven appeal weakened. The single currency held its gains in the afternoon after the European Central Bank left interest rates unchanged at a record low 1.0%, as the market expected.
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