Trade24 Daily Review 01/11/2012

 The GBP was the best performing major currency yesterday. The GBP/USD rose more than the EUR/USD and the AUD/USD did. The reason was found in a report by the Swiss National Bank, saying that the central bank of Switzerland had bought GBP to its portfolio.

Every central bank has currency reserves that they manage, so it is not something unusual. Central banks are diversifying their holdings as part of their functions. The central bank said in its statement that they had increased holdings of GBP and decreased holdings of EUR in their portfolio.

The pound also gained thanks to speculations that the BOE will not ease its monetary policy on 8/11, the day the monetary policy committee of the BOE meets again. The robust GDP figures from last week bolstered these speculations.

Anyhow, Barclays predicts that sterling will strengthen to $1.65 vs. the USD by year-end.

As opposed to the British GDP, the Canadian figure showed the economy had contracted in August. This was unexpected. Hence, the USD/CAD jumped after the figures. The figures drop the case for a rate hike in Canada, weakening the “looney”. This is why the USD/CAD jumped above parity yesterday.

On Friday both Canada and the US publish their employment data. The data will certainly make the USD/CAD move again tomorrow.

The American data is the one to watch on Friday. The labor department said they would publish the data on time, despite the storm, which stopped all work for a couple of days.

Employers are expected to have added 125,000 jobs to their payrolls in October, up from 114,000 in September, according to a Reuters survey of economists. Economists expect the unemployment rate to climb to 7.9%.

Today watch out for the ADP figures that are trying to forecast the private sector payrolls. The ISM manufacturing figure is also important. US consumer confidence figure that was delayed due to the storm will also be published today.

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