Morning Report: 08.15 London
- The British pound is enjoying a strong start to the morning with the GBP/ JPY reaching its highest levels since last summer. The EUR/ GBP is weak as the euro treads water this morning.
- Both the pound and the euro are at the centre of interest rate speculation with the MPC and ECB releasing their latest benchmark rate on Thursday. Analysts are expecting the ECB to increase rates to 1.25% on Thursday, while the MPC are expected to resist pressure and keep rates on hold at 0.5%. These moves are certainly not guaranteed with the weak periphery acting as a drag in Europe and the UK’s economy still vulnerable, but facing inflationary pressures. There could be some exaggerated moves on these pairs as the week progresses towards the big announcements. The EUR/ USD is trading just below resistance around 1.4282 stretching back to October.
- Interest rate speculation is behind the NZD/ USD’s strength this morning as traders bet on New Zealand reversing the recent post earthquake rate cut sooner rather than later.
Coming up today:
- Coming up today we have UK Construction PMI at 09.30 with a drop to 54.70 expected.
- The Bank of Canada business outlook survey follows at 15.30.
Bet Idea
- The EUR/ GBP is down around 0.33% at the time of writing, but off the lows of the day. This is not unusual, the EUR/ GBP closed within 10 pips of the day’s low just seven times since February. This despite the start of February being rather shaky.
- It may be a good bet to predict that the EUR/ GBP will rally off the lows again with a HIGHER trade predicting that the EUR/ GBP will close HIGHER than 0.8815 at the close today for a potential return of 116%.
Today’s summary:
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