THE fragile state of the UK economy has seen the pound fall against a number of currencies in the past week and with the Bank of England’s Monetary Policy Committee meeting notes likely to point to further quantitative easing, more pressure could be put on sterling. The fall against the euro has been stemmed somewhat by fears over European stability, but spread betters have still been selling the pound against the euro to try and pocket short-term profits. Spreadex quotes sterling-euro at €1.1554-€1.1560.
As forex pairs continue to tread in erratic ranges, many market themes are still in effect. The European sovereign debt issue is cancelling out much of the severe negative developments in the US. With these huge issues in play, investors are looking for strong ranges and most importantly looking at risk sentiment for market direction. European PMIs, released this morning, are a key measure of sentiment and will be focused on immensely. On euro-Canadian dollar Alpari quotes Ca$1.4062-Ca$1.4065.
We are seeing a squeeze in riskier currencies on the back of affirmation from the US credit rating agencies, despite congress failing to agree on reducing the budget deficit. Traders are also taking tomorrow’s Thanksgiving holiday to unwind positions. The euro is taking short-term advantage and is moving higher against the dollar. Capital Spreads quotes euro-dollar at $1.3533-$1.3534.
The pound may have attempted to rally off recent lows, but with advances being rejected and traders likely to want to start mitigating risk ahead of the Thanksgiving break, cable stands to remain exposed on the downside as a result. IG Index quotes $1.5656-$1.5657 on sterling-dollar.
The sell off in equities in the last few days has really taken its toll on riskier currencies such as the Aussie dollar. Just this week the Australian dollar-dollar has dipped below the parity level to mark a six-week low. Without a resolution to the ongoing debt crisis, rather like equities, it’s difficult to get excited about currencies such as the Aussie dollar. Capital Spreads quotes $0.9842-$0.9843.