US Dollar hits new heights ahead of busy week of data releases

Claire Hogarth30/Sep/2014Currency Updates

A quiet start to the markets this week, remaining mostly stable throughout Monday ahead of a big week of data releases within the major economies with all the key currencies expected to be affected.

GBP

After continuing to strengthen against the Euro towards the back end of last week, the single currency fought back versus Sterling during trading yesterday with the Pound falling by 0.2% during early afternoon before regaining ground as the markets closed. The UK currency is poised for a 1.2% gain this month, taking it to a sixth monthly advance on the Euro, its best run of gains since 2000.

There was little overall change in cable during the day in spite of weaker than expected data coming out of the UK. Net lending to individuals was down in August according to the Bank of England from £3.4 billion to £3.2 billion while mortgage approvals also declined by 3% on last month to 64,212, 1.2% less than expected. In fact, Sterling was able to end the day slightly up on the greenback, strengthening by 0.15%.

At 9.30am local time today the Office for National Statistics will be realising the Gross Domestic Product data for quarter 2 within the UK. This figure has steadily improved in recent months and this trend is expected to continue with a figure of 3.2% predicted, which would be 0.2% up on quarter 1.

EUR

The Euro ended the day where is began against both the Pound and the Dollar after initially gaining by 0.2% on both major currencies on Monday afternoon. This, after annual CPI data was released for Germany which, while remaining unchanged on last month’s 0.8%, was 0.1% higher than economists were predicting. Outlook for the currency remains poor however, with the Euro now 7% weaker against the Dollar over the course of the quarter.

A couple of major announcements today within the Eurozone start in Germany where, at 9.00am London time in Nürnberg, unemployment data will be released for the Euro’s largest and most influential country. An hour later in Luxemburg, Eurostat will be releasing the single currency’s Consumer Price Index for September and, as has been common place recently, this figure is expected to be a damaging one for the Euro, predicted to fall by 0.1%.

USD

The US Dollar index hit yet another high during Asian trading hours on Monday by reaching almost 85.8, its strongest position since late June 2010. The greenback hit two year highs on the Euro, a six year peak against the Yen and a 13 month high on the New Zealand Dollar, showing further signs of the relative strength of the US economy. The greenback is showing little signs of letting up with hedge funds and other large speculators continuing to increase their long position in the currency as further positive data continues to emerge. Personal spending increased in the US by 0.5% in August following July’s disappointing decline of 0.1%.

Consumer Confidence data within the US will be released by the Conference Board in New York at 15:00pm London time. Further good news for the greenback is expected, as this figure, which represents consumer confidence in economic activity, is estimated to rise by 0.1 to reach a seven year high.

Rest of the world

Turkey’s Lira fell to an eight-month low after the central bank kept interest rates unchanged indicating a relative lack of concern with Lira depreciation so far. The currency declined by 1.1% to its weakest level since late January with yields on 10 year bonds climbing 25 basis points to above 10%, the highest since April.

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Written by Claire Hogarth

Marketing Executive at Ebury. English Literature graduate from the University of York and a motivated professional.