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The GBP dropped to 1.6010 versus the USD

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 01/06/10


Good morning from Hamburg and welcome to our Daily FX Report. We have reached the middle of the week and the JPY weakened against its most counterparts. Furthermore we analyze the GBP and have some data from the UK.

Market review

The JPY dropped against 14 of its 16 major counterparts after the cost of protecting Asia-Pacific corporate and sovereign bonds from non-payment weakened to the lowest level since May 2008. The JPY fell to 91.85 versus the USD and the EUR climbed to 131.85. The AUD gained against the USD and the JPY as the prices of the commodities, which make up more than half the nation’s exports, traded near the highest level in 14 months. The JPY dropped to 83.85 versus the AUD and the USD fell to 0.9135 against the AUD.

The GBP dropped for a second day versus the EUR on speculation that investors bet that the Bank of England may continue its asset purchase plan to lower borrowing costs. The EUR climbed to 0.8998. While the most central banks are already talking about changing their strategies, the Bank of England is still talking about extending their asset purchase. The GBP doesn’t benefit by this maintenance and made also losses against the USD. The GBP dropped to 1.6010 versus the USD.


Since the beginning of December, the GBP has been trading in a bearish trend against the NZD. During this time, the currency pair touched its lower Bollinger Band twice and the prices could recover from its downward trend to the middle line of the Bolls. The price reached the lower Bolls again, the last days and it seems that this support could be strong enough. It remains to be seen if the GBP could recover directly.


As you can see, the CAD is trading in a bullish trend channel against the JPY. Recently, the currency pair weakened to the lower line of the trend channel. Now it seems that the prices may recover at this support like two times before when the CAD touched the lower line. Furthermore the MACD may support with a breakthrough of the signal line from below a continuing upward trend.

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