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// GBP

Tuesday 28th February 2017

Sterling remained under pressure in early European trading on Monday.

Sterling remained under pressure in early European trading on Monday with a decline to test support below 1.2400 against the dollar as the Euro rallied to a peak 0.8540. There were further concerns surrounding the political outlook amid speculation over a possible second Scottish referendum, although reports were denied by a government spokesman.

There were also expectations of month-end selling which tended to undermine Sterling sentiment to some extent. The latest GfK consumer confidence reading was edged lower to -6 for February from -5, but the Lloyds Business Barometer strengthened to the highest level for 11 months at 40 from 29 previously. The data suggested consumer spending could be vulnerable, potentially offset by wider support for the economy. Sterling gradually recovered to the 1.2450 area against the dollar as the Euro drifted slightly lower towards 0.8500, but faded on Tuesday with markets still wary over month-end volatility.

// EUR

Tuesday 28th February 2017

The latest Euro-zone money supply growth data was in line with consensus expectations.

The latest Euro-zone money supply growth data was in line with consensus expectations as growth slowed slightly to 4.9% from 5.0% previously while private loan growth was slightly stronger for the month at 2.2% from 2.0% previously. Euro-zone economic confidence edged higher for February to the highest level since 2011 which underpinned growth hopes. The latest Opinionway opinion poll for the French Presidential election registered a small improvement for Macron which provided net Euro support as concerns surrounding a potential Le Pen victory faded slightly.

// USD

Tuesday 28th February 2017

The headline US durable goods orders report was stronger than expected with a 1.8% increase for January.

The headline US durable goods orders report was stronger than expected with a 1.8% increase for January, but the figure was inflated by aircraft orders and underlying sales declined 0.2% on the month following a revised 0.9% gain for January. Pending home sales data was weaker than expected with a 2.8% decline for January which pushed annual growth to 12- month lows. The Euro rallied to highs around 1.0630 after the US data as the dollar faded slightly.

Dallas Fed President Kaplan stated that the Fed should increase interest rates in the near future which helped boost speculation of a rate hike in March with futures markets indicating the chances of a move had increased to around 50%. The shift helped underpin the dollar and the Euro retreated below 1.0600 and held just below this level on Tuesday.

// Rates

Tuesday 28th February 2017

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

GBP/USD: 1.2431

GBP/EUR: 1.1738

GBP/AUD: 1.6186

GBP/CHF: 1.2511

GBP/ZAR: 16.1388

GBP/JPY: 139.6710

USD/ZAR: 12.9744

EUR/USD: 1.0590

EUR/ZAR: 13.7334

GBP/NZD: 1.7284

GBP/CAD: 1.6385

GBP/AED: 4.5610

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