EUR/USD is trading around the 1.3250 level at present coming off from around the 1.3470 level earlier in the week before the release of the LTRO figure. Where now for EUR/USD? I’d expect a continuing downward trend over the coming weeks as there are still numerous challenges in the Eurozone and I’d expect us to break the psychological level of 1.30. We had the German Retail Sales figure out earlier this morning that came in better than expected at 1.6% against a consensus of 0.2%. It has failed to give the EUR much buoyancy. Out of the UK this morning we had PMI Construction (Feb) that posted a positive figure of 54.3 against analysts estimates of 51.2. GBP crosses have remained relatively unchanged on the release of this data with a slight uptick in GBP/USD after posting a low on the European session of 1.5905. The release of the EMU PPI (YoY) (Jan) came in better than expected with a figure of 3.7% against a consensus of 3.5%. There hasn’t been much volatility after the release of this figure with EUR crosses remaining largely unchanged.
GBP/EUR is back around the 1.20 level. I’d look at working orders around the 1.20/1.2050 and 1.21 levels. As you must all be aware by now we don’t hang around at these levels for a sustained amount of time. If you know your requirement of EUR for the upcoming month’s look to utilise a Forward Contract or Time Option to limit your risk to currency fluctuations. Please contact to discuss. We’re fairly light in terms of data releases after the EMU PPI with no data out of the US with their Canadian neighbours providing the release of their GDP figures.
GBP/USD is at interesting levels. We haven’t broken the all important 1.60 level and I don’t expect we will. I’d look for a movement down to around the 1.57 level in the next few weeks. If you’re a buyer of USD securing at anything above the 1.58/1.59 level is good value.
GBP/JPY has broken the 130 mark with JPY weakness being the driver rather than Sterling strength. If you can secure some of your JPY around the 129/130 level it looks to me as being good value.
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