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HISTORICAL DETAILS
% Change
1 Wk 0.58%
1 Month -0.27%
3 Months -0.71%
6 Months 1.78%
1 Year 5.78%
52 WEEK
High 1.6747
Low 1.5125
BLOOMBERG MEDIAN FORECASTS
Q2 2011 1.63
Q3 2011 1.62
Q4 2011 1.63
Q1 2012 1.62
DAILY DETAIL
In Asian trade, GBP/USD moved between 1.6133 and 1.6176, marginally underperforming the euro and the Scandinavian currencies with a 0.1% gain. The sterling got a bit of a boost when S&P put the US rating on Creditwatch negative, but given Moody’s had effectively done the same thing the day before, the upside was limited. The short-term direction of cable will undoubtedly be driven by the price action in EUR/USD, as economic data in the UK is light, with trader’s full attention being directed at tonight’s EU stress tests. Whilst it seems all British banks are sufficiently well capitalised and should easily pass, a failure by any key European bank could install some selling in risk currencies, with sterling coming under pressure. The EU stress tests will be released in three phases (starting at 2:00am Melbourne time), and the market will be keen to see who needs to recapitalise, and how much credit and sovereign bond exposure they have on their books. Given the previous stress tests were a complete farce with Irish banks needing bailouts directly after passing, the credibility of the tests will be key. The overall price action of GBP/USD is still bearish, and macro accounts are still expecting downside. Traders are focusing on 1.5906, which could expose further falls to 1.5781. Chris Weston, Australia
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