Foreign Exchange - Pounds Sterling and Euro Exchange Rate Outlook
The US dollar Rate put on modest gains yesterday, from 1.3907 at the US open to 1.3827 at the close, but again overnight this was reversed back to the starting point during the Asian session, giving us the same up-down swing in a short period we are beginning to dread. During Asian hours, the yen crosses set the tone, with both the Euro to Japanese Yen and Australian Dollar to Japanese Yen falling by a lot. When Europe came in, the euro exchange rate fell back to 1.3820 so far this morning.
We really want to see the euro rate fall below Monday’s low at 1.3745 to convince us that a US dollar rally is real. We get US CPI this morning and that may do the trick. Market News reported late yesterday that "On the downside, technical analysts were focussed initially on a pullback to $1.3610-15, the 50% Fibonacci retracement of the April lows near $1.2883 to the June highs near $1.4337. On the upside, the euro exchange rate will need to see a sustained break above Tuesday's highs and then psychological resistance at $1.4000 before there is talk of a return to last week's peak of $1.4177." In other words, stalemate between US dollar bulls and bears.
Sentiment today is influenced by the price of oil picking up the pace to the downside this morning, hitting $69.90 around 7:30 am ET. Foreign Exchange dealers were also watching S&P futures, around 906.50 at 7:15 am and approaching the 200-day moving average around 904.78, according to Reuters.
Pounds to US Dollars = 1.5305
Pounds to Euros = 1.1752
Euro to Pounds = 0.8050
Pounds to Australian Dollars = 2.0600
Bye For Now
Barbara Rockefeller
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