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USCR Agrimonetary Updates |
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| USCR Agrimonetary Update 6th April 2004 |
Sterling Rises to 1 Year High Against the €uro
Sterling shook off yesterday's sharp fall in UK manufacturing data and on the prospects of higher UK interest rates today rose through the £0.6600 barrier to its best level in over a year against the €uro. Economists seem to be evenly split as to whether this week's MPC meeting will raise rates now or wait until next month. Either way it is positive for sterling and even with the next USCR reference day over a week away the prospects of another UK sugar price cut look better than 50:50 at present.
Technically, if the £0.6600/0.6580 €uro support area, which has been under intense pressure today, is breached then there is little further support until £0.6520 and £0.6450. However, some still see the €uro holding, and if it does we could see it move back to £0.6620 - if it crosses the resistance line at £0.6660/70 then we could see a bounce to £0.6800.
The ECB today fixed the commercial market value of the €uro at £0.6582, creating a positive monetary gap against the current artificial "USCR" (£0.6708) of 1.878%, still well outside the +/-1% change threshold.
If this level is repeated at the next reference point (15th April) there will be a REDUCTION in our UK sugar price from Monday 19th April 2004, of some £8.21 per tonne.
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