Foreign Exchange: Pound Holds Up Against The Euro

The Pound picked up against the US Dollar during trading this morning with interbank trading up around $1.5200. The Pound against the Euro is still holding above the pivotal 1.2000 level too.

It’s an ideal opportunity for clients interested in purchasing the Euro or USD from Sterling to consider securing their rate of exchange.

TorFX is advising clients with Euro requirements to hedge at least half of any exposure whilst the rate of 1.20+ is available. By doing this some some of the risk would be taken out, albeit concern would only really come into play if Sterling fell below the 1.19 level seen in late June.

World stock markets fell during trading yesterday following reports that the pace of growth in Chinese manufacturing slowed during the month of June.  The Euro-Zone also reported its second successive monthly fall in manufacturing growth.

CIPS data for the UK released yesterday morning confirmed that Manufacturing is growing at a slower level than the previous month, albeit the UK appears to be fairing slightly better than the U.S and the Euro-Zone

All this means that investors are raising further doubts over the strength of the global recovery.

Market focus today is on the US Non-Farm Payrolls report.

A weak labour market report is anticipated, with a drop in employment of 110,000, as many temporary workers taken on for the US census are now being laid off.

EUR/USD:

Foreign Exchange markets are becoming more cautious over the outlook for the US economy.

Whilst the euro remained firm versus the US Dollar throughout overnight trade  activity was “subdued”, with traders unwilling to put on large positions ahead of the key U.S Non-Farm payrolls report for June.

A negative result for unemployment in the US is likely to weigh even further on the Dollar – the rate is currently edging towards the next key resistance area at $1.2570.

GBP/AUD

The Australian Dollar found some support overnight as a planned mining tax was reworked, with major concessions given to the industry. However the market is still trading towards the top end of the recent range. There is resistance around the 1.8000 level.

Market Analysis by Hannah Wilson, TorFX

Any opinions expressed in this document are aimed at helping readers understand market conditions and developing trends. Readers are wholly responsible for their own trading decisions.

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