THE TIPSTER

 
Philip Salter
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STERLING rose sharply against the dollar yesterday as traders sought alternative currencies amid the continued concern over US and European debt levels. Spread betters were targeting a potential test of highs of $1.6618, touched last week. However, analysts are voicing caution over a possible fall in the strength of the pound on Friday should GDP figures come in worse than expected. Spreadex offers a spread of $1.6567-$1.6570 for sterling-dollar.

Trading ranges between the euro-dollar pair have been quite tight at the start of this week. The euro spiked higher on the back of Chinese PMI figures, showing that manufacturing grew at a slower pace in August against July. Another reason for the shallow trading ranges is that traders are awaiting Fed chairman Bernanke's speech on Friday, in which he will discuss steps to boost the US economy. The pair has rebounded off its support level at $1.4497, which may signal further upside. Capital Spreads quotes $1.4490-$1.4491.

The US dollar has continued its recent recovery against the Swiss franc on fears that the Swiss National Bank will intervene further to weaken the currency. The drop on Tuesday in Swiss exports highlights the extent of the problem, but history tells us that the Swiss authorities may only be able to slow the rise of the franc, and not halt it. CMC Markets offers a spread on dollar-Swiss franc of SFr0.78873-SFr0.78892.

There’s been little movement in the yen against the dollar of late. Speculation that the Bank of Japan will intervene again is lending some support. However, with the US economy looking perilous and expectations building that we’re going to see QE3 at some stage, another jump lower for the pair is seen as inevitable by many. IG Index offers dollar-yen at ¥76.51-¥76.52.

The greenback may be under pressure across the board, although against the Singaporean dollar we’ve seen the S$1.20 level provide notable support in recent weeks. That said, Singapore is building itself something of a safe-haven status and with risk appetite unlikely to build in the near term, the expectation is that the plunge towards parity could be nothing more than a matter of time. Current IG Index price on dollar-Singaporean dollar is S$1.2054-S$1.2060.