Quiet day on the currency markets

Another fairly subdued day in the currency markets yesterday with the dollar being the main loser against both the pound and the Euro. Over the last few trading sessions we have seen the dollar fall to its lowest levels in 3 months as the markets continue to assess the recovery both here and in the Eurozone and it seems that for the time being investors are prepared to pile into the riskier currencies of GBP and EUR. One pattern that has changed however is the pound maintaining its levels against the euro. Previously when we have seen the euro strength against the dollar it has also strengthened against the pound making the euro much more expensive to buy. For now it seems the pound is holding up and it does give the impression that the doom and gloom of the double dip recession is in the past but we all know how quickly things can change and one poor piece of UK data could well see the pound fall. Markets may also be cautious with the imminent arrival of the BoE governor Mark Carney as it is still unclear as to the approach he will take in the slow recovery. Today is fairly quiet in terms of data releases but we do have a few bits out from the UK. Manufacturing and Industrial production figures are due this morning and markets will be hoping for an improvement from last month’s poor figures. We also gave a GDP estimate which will give us a clue as to how the ‘powers that be’ see the recovery….are things still improving or do we risk the unthinkable triple dip ! As always do keep in touch with your account manager here at Currency Index to make sure you are up to date with all the market movements.