After being beaten up for weeks against a whole host of currencies, the Pound has finally shown that it’s got some fight in it.

The biggest gains have come against the Yen with the GBP/JPY pair up by almost 1%.

The Pound is having its best week for months on expectations that the Bank of England will suspend its asset purchase program; which it has been running to help stimulate the UK economy.

Some commentators have claimed this has led to the market being flooded with Sterling. Now that the taps look like they will be turned off, the Pound is back in demand.

Other than the Pound, today’s other big mover is the Australian Dollar as it continues to benefit from the recovery in commodity prices. Yesterday, oil hit $78 for the first time in 12 months.

What’s moving:

The Pound: (GBP/USD, EUR/GBP & GBP/JPY)
The Australian Dollar: (AUD/USD & AUD/JPY)

Trade Idea:

The Pound is recovering well, but the Australian Dollar is still the strongest performer in recent weeks. A Fixed Odds Double (Up) trade could return 100% and the AUD/JPY could be one way to play this.

Today’s market movers:

One of today’s potentially market moving events is the Canadian Core CPI at 12.00. CPI measures the change in the price of goods purchased by consumers.

A good number that comes in above the forecast of 0.2% could see the Canadian Dollar rise.

Forex Information:

The smallest unit of movement in forex trading is known as a pip. So a move in the GBP/USD from $1.6300 to $1.6301 is a move of 1 pip.

Currency guide:

USD: US Dollar
GBP: Great Britain Pound
JPY: Japanese Yen
EUR: Euro
CHF: Swiss Franc
AUD: Australian Dollar
CAD: Canadian Dollar
NZD: New Zealand Dollar

This website content does not constitute investment advice. No individual contributor, contributing company nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

Throughout the Asian session, the so called commodity currencies of the Australian and Canadian Dollars are pushing ever higher.

The Australian Dollar hit another 12 month high against the US Dollar this morning and broke the ¥82.00 barrier against the Japanese Yen. The AUD’s all time high against the US Dollar is $0.9895, not far off parity (1 to 1).

With oil and gold prices shooting higher it may not be long until that record is beaten.

Commodity Currencies Continue to Climb

The AUD/USD is climbing well so a Fixed Odds Double (Up) trade could be one way to trade it today.

The USD/CAD (US Dollar/Canadian Dollar) is also on the move, heading towards parity on the back of the commodity rally and the safe Canadian banking sector.

The Pound is fairing better today, rising by around a third of a percent against the Dollar and Yen.

Economic news

It’s a busy day on the economic news front with a large number of potentially market moving events. We start with the ECB monthly bulletin at 09.00 BST followed by inflation data at 10.00.

ECB president Trichet speaks at 12.25 and you can be sure that traders will be hanging on to his every word.

The day’s top announcements are from the US at 13.30 GMT. US CPI and unemployment claims will tell traders a lot about the state of the world’s largest economy. Watch out for some fast moves around this time.

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European markets look set for a very strong start after a strong session in Asia. The FTSE, CAC and DAX are set to open around 1% higher.

Traders are buying on speculation that the US Federal reserve will keep rates at record low levels until well into 2010.

Banks also recovered yesterday evening as Goldman Sachs regained some ground after being downgraded by Meredith Whitney. Whitney rose to fame during the credit crunch by predicting a tough time for US banks. She has also been credited with fuelling the rally in Goldman’s in recent months after a previous upgrade.

Overnight, the Bank of Japan voted to keep rates at 0.1% and made no comment on whether it will ends its corporate debt purchase program. Reading between the lines, traders are seeing positives in this stance, believing it means that the Japanese economy no longer has need for such activity.

This morning we have claimant count change data in UK at 09.30 BST and important retail sales numbers from the US at 13.30. At 19.00 we get the release of the minutes from the last FOMC meeting. Traders will be keen to see if recent speculation around low rate policy is backed by any evidence.

Australian Dollar Benefits from Commodity Strength

The Dollar is on the back foot against most currencies on speculation surrounding the extension of the Fed’s low rate policy. The biggest falls have come against the Yen which is in turn having a strong day in its own right thanks to the Bank of Japan announcement. Against the Yen, the Dollar is off 0.8% while the Euro and Pound are down 0.5%.

Another currency going from strength to strength is the Australian Dollar. The AUD/USD made a fresh new high in the Asian session as the Australian economy benefits from rallies in gold and oil.

With this in mind, the Australian Dollar could have further to rise. A Fixed Odds Double (Up) trade could be one way to play this over the next couple of days.

This website content does not constitute investment advice. No individual contributor, contributing company nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

European markets are currently set for a weak opening after a strong showing yesterday.

The FTSE 100 smashed through the 5190 level that has been proving so troublesome over the last month to close at a new 12 month high of 5210.

Unfortunately, US markets couldn’t sustain their early promise yesterday and European futures are indicating a drop of around 10-15% at the open. Still, optimism is still running high that the coming US earnings season will push this rally on to the next phase.

This morning, UK inflation is a key focus with the latest CPI and RPI figures released at 09.30 BST. RPI is forecast to come in at -1.5%. Any signs of further deflation could put even more pressure on the beleaguered Pound. MPC member Bean is also scheduled to talk at 14.00.

Sterling Weakens Against Dollar

Throughout the Asian session, the Dollar has gained ground against a basket of currencies, most notably the Pound as traders take positions in Sterling ahead of this morning’s inflation data. This makes GBP/USD (British Pound / US Dollar), today’s pair in play.

Yesterday the GBP/USD hit its lowest levels since May and, with today’s inflation data, there could be further downside to come. One way to play this could be a Fixed Odds One Touch trade with the trigger set to somewhere in the $1.55 region.

This website content does not constitute investment advice. No individual contributor, contributing company nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.