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Tuesday 11 th May 2008
Good Morning,
USD
The dollar rose for the first time in four days against the euro on speculation Federal Reserve policy makers will signal inflation may prevent further reductions in interest rates. The U.S. currency advanced the most against the U.K. pound after an industry report showed London's property market had the most widespread price declines in at least 14 years last month. The dollar also gained versus 13 of the 16 most-active currencies tracked by Bloomberg before speeches on the economy by regional Fed presidents Janet Yellen, Thomas Hoenig and Richard Fisher. "Policy makers may emphasize the risk of inflation, given record-high oil prices," said Akifumi Uchida, deputy general manager of the marketing unit in Tokyo at Sumitomo Trust & Banking Co. "The Fed will face difficulty in cutting rates further. It's dollar-supportive."
EUR
The euro was supported after European Central Bank President Jean-Claude Trichet said current interest-rate policies will keep inflation in check. Trichet said yesterday in a television interview on Sky TG24 in Milan that the bank's "present monetary policy stance" will help it achieve its goal of maintaining price stability. The ECB left its main refinancing rate at 4 percent on May 8, saying the inflation rate may remain high.
GBP
The UK CPI came out at 3 percent today for the month of April, much higher than the 2 percent target set out by the BoE. UK producer output prices rose at a record pace of 1.4 percent MoM in April versus +1.1 percent MoM in March (initially +0.9 percent) on the back of higher prices for petroleum products, alcohol and tobacco and other manufactured products; on the input side prices advanced 2.4 percent MoM versus +1.7 percent MoM previously (initially +1.8 percent). UK BRC total retail sales slowed to +1.0%YoY in April versus +1.1%YoY in March; on a like-for-like basis, annual sales declined for two consecutive months which was the worst outturn in three years according to the report. UK RICS house price balance declined across regions to -95.1 percent in the three months to April versus -79.4 percent in the three months to March; this was the weakest reading since the series began in January 1978; interest from prospective buyers decreased at the sharpest pace on record
ZAR
South Africa's rand added to Monday's strong gains early on Tuesday, buoyed by improving risk appetite and buyout talk surrounding mobile operator MTN. Asian shares rose with banks bolstered by further signs that the worst of the credit crisis may be over and after a strong performance by New York stocks. But domestic resource counters may be hampered by lower metals prices after gold fell as oil's rally faltered. The rand was trading at 7.5890 against the dollar at 0640 GMT, 0.2 percent stronger than its close in New York on Monday, when it strengthened almost two percent, partly on overseas interest in MTN, Africa's biggest mobile operator. "It is very much a response to the MTN rumours that are going around at the moment and a resumption of carry trades as a result of the yen losing some ground overnight," said George Glynos, managing director of market analysts ETM.
Morning Market Rates: (Please note: These are indication prices only, they are not offer rates)
GBP/USD: 1.9543
GBP/EUR: 1.2553
GBP/AUD: 2.0585
GBP/CHF: 2.0427
GBP/ZAR: 14.727
USD/JPY: 103.21
USD/ZAR: 7.551
EUR/USD: 1.5461
EUR/ZAR: 11.71
GBP/NZD: 2.5262
GBP/CAD: 1.9611
And finally,
Have a god day
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