Forex snapshot

The euro remains range-bound while the pound eyes $1.64. 

Euro and US dollar notes
Source: Bloomberg

Euro remains within range

The euro is broadly unchanged versus the US dollar as there was little economic news from either region to force the currency pair out of its range.

The euro is trading at $1.2848, after seeing little movement overnight. In fact, as far as the eurozone is concerned, it is a quiet week in terms of economic data, so the focus will remain on the US dollar. Tomorrow, the eurozone will release the private loans and money supply data; this should be interesting given the European Central Bank cut interest rates at the beginning of the month and announced the buying of asset-backed securities (ABS). The ECB is now hoping banks will ramp up their lending which will be key to the region’s recovery.

As I stated yesterday the risk remains on the downside; if the US has strong home sales figures at 3pm (London time) the euro could target $1.28.

Pound eyes $1.64

The pound is edging higher as political and financial stability returns to the UK in the wake of the Scottish referendum.

The pound is trading at $1.6385, dropping below the $1.64 mark but appearing to make another attempt at it. Sterling traders have little to get excited about this week as we are not expecting any major economic announcements from the UK in the next few days. Traders are slowly gaining confidence in the pound but the strong US dollar still dominates the headlines.

Loretta Mester of the Federal Reserve is due to speak at 5.05pm (London time). The pound will find it difficult to target $1.65 unless Ms Mester’s comments are very dovish, which I doubt they will be. Pressure on pound could push to back to $1.6310.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.