Finotec News Archive - September 03 2008

Cable lowest in 2 1/2 years

The pound fell to its lowest level in 12 years against the currencies of the UK’s major trading partners as the UK released more pessimistic economic data

Toby Koehler
03 September 2008

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EUR/USDUSD/JPYGBP/USDUSD/CHF

Resistance
1.4595
1.4545
1.4530
110.30
109.95
109.55
1.8015
1.7945
1.7890
1.1605
1.1460
1.1200

Support
1.4410
1.4385
1.4360
108.00
107.60
107.30
1.7635
1.7615
1.7420
1.1090
1.1040
1.0975
The pound fell to its lowest level in 12 years against the currencies of the UK’s major trading partners as the UK released more pessimistic economic data. A report showed that British consumer confidence fell to its weakest level in more than 4 years. Sterling also fell to a record low against the euro on bets the Bank of England will resist cutting interest rates tomorrow, delaying an economic recovery. On Wednesday the Nationwide building society said its index of consumer confidence held steady last month. However, the sentiment of those surveyed was that it was a bad time to make large purchases. Cable was trading at 1.7703 at 8.37am GMT
The dollar leapt to an 11 month high against a number of leading currencies on Wednesday as investor’s unwound positions in higher yielding currencies like the Euro and the Aussie. There was more upside for the greenback as crude dipped below $110 a barrel. As oil dropped, investors have unwound bets favouring currencies with higher interest rates.
Meanwhile the Euro dropped to its lowest level in more than 7 months against the dollar on speculation the European Central Bank, and its President Trichet, will express concern regarding the Euro zone economy this week. With Wednesday’s retail sales figures coming out below expectation, this is another bad sign for the Euro Zone.
‘The outlook for European economies has deteriorated a lot in a very short time span. It's only natural to speculate about when officials will have to lower rates,’ said deputy general manager of foreign exchange in Tokyo at Nomura Trust. The euro declined to $1.4412, the lowest since Jan. 22, before trading at $1.4430 as of 8:21 a.m. in London

Finotec Analysis Team
03 September 2008

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Today's Economic Events





Time Event Currency Period Previous Forecast Significance Actual
14:00Factory Orders m/mUSDAug1.7%1.0%31.3%information
13:00overnight RateCADSep3.00%3.00%43.00%information
13:00BOC Deputy Governor Jenkins SpeaksCADSep3information
09:00Retail Sales m/mEURAug-0.6%0.0%3-0.4%information
09:00GDP Annualized q/qEURQuarterly-0.2%-0.2%1-0.2%information
08:30Services PMIGBPAug47.4449.2information
08:00Services PMIEURAug48.247.0149.2information
01:30GDP q/qAUDAug0.6%0.4%40.3%information
00:30Services PMIAUDAug42.847.0149.2information
00:10Retail Sales m/mEURAug-0.6%3-0.4%information
00:05Home Sales ExistingGBPAug-1.7%-1.8%3information

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