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// GBP

Friday 17th February 2017

Sterling maintained a solid tone against the dollar ahead of the US open on Thursday, but continued to hit resistance above the 1.2500 level.

Sterling maintained a solid tone against the dollar ahead of the US open on Thursday, but continued to hit resistance above the 1.2500 level. The Euro regained the 0.8500 level which helped underpin confidence with a further advance to the 0.8550 area as Sterling overall lost support with markets still wary over the risk of further medium-term losses. A slightly more defensive attitude surrounding risk appetite curbed Sterling support, although underlying selling interest above 1.2500 against the dollar was the more important factor.

Sources suggested that the government was looking to trigger Article 50 around the time of the March 9-10 EU Summit and the Brexit debate will sharpen again next week when parliament returns from recess. The latest retail sales data is due on Friday and another weak release would maintain expectations that there will be an underlying slowdown in spending as Sterling consolidated around 1.2500 against the dollar.

// EUR

Friday 17th February 2017

ECB minutes from January’s meeting confirmed that the central bank would look through increases in inflation triggered solely by a surge in energy prices.

ECB minutes from January’s meeting confirmed that the central bank would look through increases in inflation triggered solely by a surge in energy prices and would concentrate on whether there was any evidence of second-round inflation effects. The ECB expected that overall inflation pressures would remain muted despite an important element of uncertainty surrounding developments in wages and there was a further pledge to maintain a very accommodative monetary policy.

// USD

Friday 17th February 2017

The US data remained robust with initial jobless claims increasing only slightly to 239,000 in the latest week.

The US data remained robust with initial jobless claims increasing only slightly to 239,000 in the latest week from 234,000 previously which still indicated a strong labour market with layoffs remaining at low levels. There was a small decline in housing starts to an annual rate of 1.25mn from 1.28mn previously while permits rose to 1.29mn from 1.23mn.

There was also a strong reading for the February Philadelphia Fed manufacturing survey which increased to 43.3 from 23.6 and the highest reading for over 30 years, although the prices indices declined slightly on the month.

Fed Vice Chair Fischer backed Yellen’s stance on policy with expectations of further increase in rates and markets will continue to monitor comments in order to assess the potential for a rate hike at the March meeting. The dollar pushed higher immediately after the data, but was again unable to gain any traction and the Euro resisted any significant selling. Overall, the Euro rallied to the 1.0680 area as the dollar’s trade-weighted index declined by around 0.60%.

// Rates

Friday 17th February 2017

Morning Market Rates: (Please note: These are indication prices only, they are not offer rates)

Morning Market Rates: (Please note: These are indication prices only, they are not offer rates)

GBP/USD: 1.2471

GBP/EUR: 1.1713

GBP/AUD: 1.6240

GBP/CHF: 1.2462

GBP/ZAR: 16.2892

GBP/JPY: 141.0880

USD/ZAR: 13.0534

EUR/USD: 1.0646

EUR/ZAR: 13.9044

GBP/NZD: 1.7333

GBP/CAD: 1.6309

GBP/AED: 4.5848

Have a great day. 

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