The major news in the markets this morning is that the People’s Bank of China has cut its reserve ratio, ie the amount of cash banks have to hold in reserve, so as to boost lending and stimulate the Chinese economy. Riskier assets have benefitted from the news.
Today has been billed as the final deadline for a Greek bailout agreement to be made, though it would hardly be a shock to see a deal postponed once again. Based on the assumption that a deal does finally emerge, the euro may see a short-term rally.
STERLING/EURO: This pair is trading at the top of its 2012 trading range but could come under some pressure in the short-term if Greece finally delivers.
STERLING/US DOLLAR: Sterling has reached a fresh high against the US dollar and $1.60 is coming back into view.
STERLING/US DOLLAR: Sterling has reached a fresh high against the US dollar and $1.60 is coming back into view.
EURO/US DOLLAR: This pair was a major mover on Friday and has bounced two cents to $1.32, not based on much.
STERLING/AUSTRALIAN DOLLLR: A cut in the reserve ratio in China helped the aussie dollar recoup some of Friday’s lost ground.STERLING/NEW ZEALAND DOLLAR Sterling remains on a downtrend against the kiwi dollar and amid positive Chinese news, Greek deal expectations and hopes for a RBNZ rate hike, this could well continue.
STERLING/CANADIAN DOLLAR: Sterling is trading in the middle of its two-month trading range despite last week’s strong US manufacturing figures.
Richard Driver
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
