GBP/USD tops out at 1.65 again

Currencies Direct July 29th 2009 - < 1 minute read

In the last few weeks we have seen a number of attempts to breach 1.65 on GBP/USD and every time the market has failed to hold above this level. A similar pattern has emerged in USD/JPY which has struggled to hold over 95. In the last four trading days we have seen a tight trading range for GBP/USD which is unusual in the light of the volatility in the last few months. Today we have a few data snaps in the calendar for the UK which could shake the markets back into life. We have UK mortgage approvals, consumer credit, net lending and M4 money supply out this morning.

Yesterday the USD strengthened against the pound from over 1.65 back to 1.6350 and from 1.4280 down to 1.4108 against the euro. US stock markets fell more than 1% and this helped swing money back into the USD. US economic data supported the trend into risk aversion as consumer confidence fell from 49.3 to 46.6, the lowest level in 3 months. The S&P/Case-Shiller home price index fell 17.1% in May- this is the main measure of US house price movements. In addition US corporate earnings were shaky and Bank of America announced that they will be shutting 10% of branches signaling further lay offs.

Later today we have durable goods orders and the Fed beige book which will give further insight into the health of the US economy. Again good data will lead to a weaker USD and vice versa. Key moves in the markets from yesterday were EUR/USD topping just under 1.43; AUD making gains across the markets and GBP/USD retracing from 1.65.

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Currencies Direct

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