Morning Report: 07.30 London
• This morning the US dollar is on the defensive after yesterday evening's late recovery.
•The EUR/USD is up 0.64%, the AUD/USD us up 0.6%, the NZD/USD 0.43% and the USD/CHF is down 0.55%.
Coming up today
• Coming up today we have UK jobless claims data which is expected to show a smaller decrease than the previous month. The unemployment rates and average earnings are expected to stay at the same level as last month.
• At 13.30 we have US building permits with a slight rise to 0.56M expected.
• From 15.30 and 16.15 the Bank of Canada release their latest policy report with the press conference to follow.
Bet Idea
• The GBPUSD has been on a storming run of late, going 8 up days in a row, with today looking like it will be the ninth.
• This run is not entirely down to the pound though, as the chart of the EUR/GBP below shows, when measured against other currencies, the pound has had its days of weakness.
• The EUR/GBP has recently been trading in just over a 200 pip range, but is now slap bang in the middle of the range once again. A breakout of this range is likely in the near future, but the direction is unclear. If reports like this from Bloomberg are anything to go by, the breakout could come to the upside with the pound weakening significantly in 2011.
• The impact of the VAT cuts are yet to be felt and while inflation continues to run above target levels, the UK economy is in for a tricky new year period.
A HIGHER trade predicting that the EUR/GBP will be above 0.85 in 30 days time could return 164% if successful.
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