GBP opened Tuesday’s trading over the 1.56 mark against the US dollar and climbed throughout the day on the background of better than expected, but still poor, manufacturing figures from the UK. GBPUSD managed to climb to a high of 1.5684 before settling at1.5645 when markets closed.GBP rallied back from a lacklustre previous day and advanced to maintain the range-bounce price action carried over from June, but the Bank of England inflation report today may install a bearish outlook for the GBPUSD as market participants expect the central bank to lower its forecast for growth and inflation.
Official data showed yesterday output from the UK’s industrial sector collapsed in June, posting its sharpest drop in more than three-and-a-half years as the extra public holidays during the month appeared to weigh on production.
GBPEUR showed a very tight trading range yesterday. Opening at 1.2572, the pair only managed a day’s high of 1.2618 before settling back at 1.2590 towards the close of trade. GBPEUR opens this morning much unchanged at 1.2592.
EURUSD opened the markets at 1.2423 seeing a brief drop below 1.24 to the day’s low of 1.2396 before holding a steady position for most of the afternoon closing trade close to the day’s high of 1.2442.
The US Dollar and the Japanese Yen declined in overnight trade as Asian stocks advanced, denting demand for the safe haven currencies.
Canada’s dollar gained to a three-month high against its US counterpart as risk appetite increased and crude oil, the nation’s biggest export, rose.
The euro rose against the yen and dollar after Germany supported European Central Bank President Mario Draghi’s proposals to stem the region’s debt crisis. Euro gains were supported as the European Union said it had received no requests for the region’s rescue fund to buy government bonds.
Draghi outlined a plan last week under which the ECB may buy debt of struggling euro-bloc countries in tandem with the region’s bailout fund, while saying the details still need to be worked out over the coming weeks.
The euro held gains even after Germany’s Economy Ministry in Berlin said factory orders dropped 1.7 % from May, when they rose 0.7 %. Economists projected a 0.8 % decline.
Australia’s dollar rose to the strongest since March against the US dollar after the Reserve Bank said current policy settings were “appropriate.” RBA Governor Glenn Stevens and his board said in a statement the nation’s growth was close to trend.
The Swiss National Bank’s foreign- currency reserves surged to a record in July as the euro region’s increasing turmoil forced policy makers to step up their defence of the franc ceiling. The franc rose 0.2% to 96.70 centimes per dollar and was up to 1.20184 per euro.