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USCR Agrimonetary Updates |
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| USCR Agrimonetary Update 14th April 2004 |
Sterling Suffers Against Dollar and €uro as Dollar Jumps over 1%
Sterling fell heavily against the US dollar today after much better than expected US data raised the prospect of a rise in US interest rates sooner rather than later. On the back of the dollar strengthening, sterling had also fallen some 1.5% against the €uro, trading around the £0.6660/70 area (back inside the USCR no change band) at the time of writing. This week's sterling/€uro range has so far been between £0.6550 and £0.6670 that equates to a sugar price cut of over £10 to no change in the space of 24 hours.
Technically analysts expected buyers to emerge at £0.6560/50, and now that the £0.6600 and £0.6620 levels have been regained and the rapid bounce to £0.6650/75 is happening, we could be seeing the beginning of a technical recovery towards £0.6800. However, it appears that sellers still have the upper hand at present, and it would be no surprise to see a move back to £0.6520/10. Losing this area would open the way to £0.6450 but whether the return to sub £0.6641 can happen by tomorrow's USCR reference point is any ones guess!
The ECB today fixed the commercial market value of the €uro at £0.6621, creating a positive monetary gap against the current artificial "USCR" (£0.6708) of 1.297%, still outside the +/-1% change threshold.
If this level is repeated at tomorrow's reference point (15th April) there will be a REDUCTION in our UK sugar price from Monday 19th April 2004, of some £5.67 per tonne.
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