Caxton FX Analyst, William Cattigan, appears on Fox Business

Caxton FX Analyst, William Cattigan, appears on the Fox Business channel to discuss the uncertainty in the currency markets.

aussie dollar gains ground to sterling

The Australian dollar strengthened against the pound over weekend, gaining further ground as persistent worries about the British banking sector continued to weigh on sterling. GDP data released in the UK on Friday also undermined sterling, as it showed the British economy contracted by a larger than expected 1.5%. It is a public holiday in Australia today, while in the UK BBA mortgage approvals data will be released.

Kiwi trades mixed ahead of Wednesday's rate announcement

The New Zealand dollar strengthened against the pound over the weekend following the release of British GDP data on Friday. However, the pound is recovering lost ground this morning, as speculation grows that the Reserve Bank of New Zealand will cut interest rates aggressively when they meet on Wednesday. Many analysts are suggesting the central bank will cut rates by a full 1%.

Sterling under pressure against the US dollar

Sterling fell to a 23 year low against the dollar on Friday following the release of Gross Domestic Product data which confirmed that the UK is officially in recession. GDP fell by a larger than expected 1.5%, the largest quarter on quarter fall since 1980. By 14.57 GMT on Friday sterling was down 1.5 percent at $1.3644, after previously falling to $1.3500, the lowest level since September 1985. Separate data showed UK retail sales rose 1.6 percent in December from the previous month, but difficulties led to the data being compiled on a non-seasonally adjusted basis.

There are several announcements taking place in the US today including Existing Home Sales and Leading Indicators at 15.00 GMT. In the UK, BBA Mortgage Approvals data will be released at 09.30 GMT.

Sterling weakens further on Friday following GDP figures

Sterling rounded off a miserable week against the euro on Friday, and finished still lower against the single currency. Friday was the day when the UK’s recession was officially confirmed, as GDP figures revealed that the UK economy contracted at its fastest pace since 1980. It is the first time since 1991 that the UK has been in recession, although it has been on the cards for some time, with 2009 already looking tough for the economy. Better than expected retail sales figures were largely ignored by investors, as the negative sentiment surrounding the pound continues. News out of the eurozone was also poor, as soft data was released in both the service and manufacturing sectors.

There are no major economic announcements due in the eurozone today, whilst within the UK, mortgage approvals data is released.

Sterling / Dollar hits 23 year low

The pound has lost further ground against the dollar today, sinking to a fresh 23-year low as data showed the UK economy shrank at its fastest pace since 1980 and confirmed Britain had fallen into recession for the first time in nearly 20 years.

UK gross domestic product shrank 1.5 percent in the three months to December, more than forecasts for a 1.2 percent decline. It was the largest quarterly drop since the second quarter of 1980.

Sterling has already dropped about eight percent against the dollar since the start of the week, amid widespread concerns about the British banking system and the government's growing debt.

Sterling still under pressure against the euro

The pound has remained under pressure against the euro today, undermined by extreme risk aversion as investors continue to worry that the UK is heading for a deep financial crisis. Figures showing a fall in UK factory orders and a drop in automobile output yesterday also kept sterling under pressure, as they supported the view that the Bank of England will have to do more than cut interest rates to salvage the British economy.

The Pound falls again

The pound continued to be sold off today reaching record lows against the Japanese Yen. Sentiment is driving the pound to new lows every day and there doesn’t appear to be any floor. News from the U.K economy has been consistently bad and with concerns over the government’s debt rating there in no end in sight. Parity against the euro now seems a genuine possibility.

Caxton FX Senior Analyst, Alex Dunn, appears on Fox Business

Caxton FX Senior Analyst, Alex Dunn, appears on the Fox Business channel to discuss whether the pound will continue to fall against the dollar.