THE TIPSTER
THE Bank of England’s Monetary Policy Committee (MPC) begins its meeting today to decide whether its QE policies should be extended further. Sterling has fared better than might have been expected, but given the poor economic data and banking sector woes, pressures on sterling remain to the downside. With analysts revising US non-farm payrolls upwards, the dollar could find some support for the weekend and cable will be ripe for profit-taking. IG Index currently offers sterling-US dollar at $1.6297-$1.6300.
However, the dollar may struggle to make gains against the euro. It has staged a strong fightback against the euro in the last week, but the 50 day simple moving average (SMA) is offering some support to euro-dollar at $1.4656. The recovery may be capped though by strong resistance at the 20-day SMA which currently is at $1.4730. ShortsandLongs.com has a spot euro-dollar rate of 1.4650-1.4653.
Ongoing intervention by the Swiss National Bank (SNB) and a technically-driven dollar rally should push the US dollar higher against the Swiss franc. Foreign exchange traders should therefore be looking to go long on US dollar-Swiss franc. Currencies Direct is quoting a market price of SFr1.0267.
On Tuesday, the Reserve Bank of Australia (RBA) hiked rates for the second month in a row, but the Aussie is failing to extend gains over US$0.90 against the greenback. The market is split – could a further spell of good US data continue to underpin the US dollar, or will the Aussie’s upward trend remain intact? Some analysts certainly think the latter is likely and are calling for the Aussie dollar-US dollar to reach parity. Capital Spreads is quoting $0.8935-$0.8938 for the pair.