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  • IFX Market Report for 17/07/2012

    Daniel Fountain
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    UK

    GBPEUR traded the day within the 1.27 trading range on Monday with very little in the way of UK data releases to create volatility in the markets. The currency pair posted a high of 1.2768, a more than 3 year high against the low of 1.2705 set in early morning trading. GBPEUR now finds support at 1.2706 and 1.2634.GBPUSD spent the morning trading within the 1.55’s until the release of the US Retail sales where poor figures missing expectations allowed sterling to gain against the greenback and push into the 1.56’s, setting an overnight high of 1.5676. Cable will find support at 1.5592 and 1.5517.

    Markets look towards the Inflation data being released from the UK this morning, where forecasts are predicting the lowest level of inflation in two years at 2.8%.

    Jerry Del Missier, former Barclay’s chief operating officer said yesterday the bank’s then-chief executive phoned him in 2008 to instruct him to lower the bank’s interbank lending rate submissions but that he didn’t view the decision as “improper.”
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    WORLDWIDE

    EURUSD traded within a 114 pip range yesterday posting a high of 1.2289 against a low of 1.2175, however overnight the pair have pushed higher and has broken above the 1.23 levels in early morning trading.

    Yesterday the International Monetary Fund approved the latest tranche of its emergency bailout program for Portugal, applauding the debt-beleaguered nation for its efforts to return to economic health.

    US data failed to meet expectations as retail sales posted a negative figure of -0.5% against the forecast 0.1% figure forecast, showing a huge slowdown in the sector, which triggered a rally in the GBPUSD price through 1.56.

    Federal Reserve Chairman Ben Bernanke heads to Capitol Hill today for the first of two days of questions, comments and haranguing from lawmakers as he delivers the central bank’s semi-annual report to Congress. With two weeks until the Fed’s next policy meeting, lawmakers are likely to hound Bernanke on whether the central bank plans to launch another round of bond-buying.

    New Zealand’s central bank has ample room to keep rates on hold after annual inflation slowed to its lowest level since the fourth quarter of 1999. Statistics New Zealand said this morning that the consumer price index rose 0.3% on the quarter in the second quarter, below expectations of a 0.5% rise. The index was up 1.0% on the year, compared with expectations of a 1.1% rise.

    China needs more active fiscal policies among others to support its recent credit loosening measures, which may not be as effective as expected, Yan Qingmin, assistant chairman at the China Banking Regulatory Commission, wrote in Financial News. “Effects of credit loosening policies are waning as the demand for credit is weakening,” Mr. Yan said “Thus (we) urgently need support from fiscal and other policies.”

    Daniel Fountain / 16.07.2012

    Editor, Hotel Designs

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