Daily Currency report
5th August 2012
Daily Market Commentary
From Peter-John Theuninck, Currency Analyst at Baydonhillfx
After an exciting weekend of Olympics sports that saw Andy Murray beat rival Roger Federer to claims gold in the men’s singles tennis, Ben Ainslie make history as the most decorated sailing Olympian of all time and Usian Bolt once again proving he was the fastest man in the planet, the markets are clearly in far less of a positive mood this morning. Team GB are now third in the medals rakings behind China and the United States and with another week left to the games our team can firmly set their sights on beating the 19 gold medals they earned in Beijing.
The markets are certainly more sobering this morning as the Dollar pushes higher after profit-taking and increased risk aversion pulled it lower all of Friday. The positive US employment figures initially boosted the Dollar as the chances of an imminent cash injection by the US Federal Reserve Bank eased but as concerns of economic instability in the US diminished risk appetite improved and the US Dollar weakened to close the week at its lowest level versus the Euro. Better than expected US ISM non-manufacturing data added to the technical rally on Friday as the US service sector continued to expand over the month of July.
The UK Halifax house price index, released earlier this morning, came out in line with expectations which is to say prices fell 0.6% in July, in June prices rose 0.8% and the drop in the numbers in putting pressure on the Pound as it provide yet another reason to be concerned over growth in the British economy. Risk aversion is returning to the market and with no other significant data scheduled for today, technical trading is likely to put pressure on both the Euro on the Pound.
The Bank of England delivered no changes to monetary policy last week so the UK central bank’s inflation report which is being published on Wednesday will be closely scrutinised by the market, analysts’ will want to see whether the report will shed some light on what could be expected from the Bank of England over the next few months.