Today's Exchange Rates: GB Pound Selloff, Euro Firms, Dollar Boosted by Data, Swiss Franc Focus

At the time of writing the following mid-market levels are witnessed:

• The pound to dollar exchange rate is 0.17 pct down at 1.6957.
• The pound to euro exchange rate is 0.21 pct in the red having reached 1.2450.
• The euro dollar rate is 0.04 pct higher at 1.3612.
• The euro Swiss Franc rate is at 1.2164.

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Pound exchange rates today: GBP sent tumbling

The pound dollar rate has slipped through the 1.7 mark as Bank England Governor Mark Carney's testimony in front of the UK Parliament suggested that the MPC is a long way off from hiking UK interest rates.

Mr. Carney's dovish statements in front of the Treasury committee were a stark contrast to a week ago when he suggested that rates in UK could rise as early as this year.

"It is clear from the cautious tone of the BoE policymakers, that UK monetary authorities remain far more concerned about stifling out the nascent recovery than about controlling any inflationary or asset bubble pressures," says Boris Schlossberg at BK Asset Management.

Speaking in front of Parliament Mr. Carney attempted to clarify his earlier views by stating that he was merely expressing his own opinion rather than the position of the full MPC. He noted that he did not consult MPC members prior to making the comments last week.

"Cable took it on the chin as a result of today's testimony as bulls bailed out their positions sending the pair to a low of 1.6972 before it found some support. Sterling may now consolidate for the rest of the week," says Schlossberg.

Elsewhere, the pound euro exchange rate (GBP/EUR) has fallen below the 1.25 level as the pullback continues apace. We would expect dips here to be temporary.

Euro exchange rates today: Selling EUR/USD on rallies

Germany's IFO Business Climate index for June fell to 109.7 from 110.4 (expectations were for a reading of 110.3), with the Current Assessment flat from May and Expectations slipping to 104.8 from 106.2.

Nevertheless, the euro dollar rate continues to edge higher, however Ipek Ozkardeskaya at Swissquote Bank reckons rallies will struggle:

"EUR/USD traded in the tight range of 1.3593/1.3605. Light bids above the 21-dma (1.3595), timid attempts towards 200-dma (1.3671) keep the direction unclear.

"We remain sellers on rallies as long as the market values the EUR/USD below its 200-dma. EUR/GBP remains capped by solid offers at 0.80000+. The current levels being well absorbed by the markets, the bias remains on the downside."

Dollar exchange rates today: Low volatility

The US dollar complex has had a good day against the pound but this is due to GBP weakness more than USD strength it would seem.

Elsewhere, the USD is mixed, losing ground to the EUR, despite weaker than expected IFO data from Germany, but gaining versus the AUD.

Falling volatility, the lament of traders recently, reached a new milestone today as USD/JPY implied volitlity fell to a record low, according to Bloomberg data; a benign, low volatility environment should favour higher yielders in the G-10 and EM FX space.

Swiss Franc exchange rate

In Switzerland, the significant decline in exports (-5.0% m/m vs. 0.6% prev.) has partly been offset by -2.5% m/m drop in imports expanding the trade surplus from 2.45bn francs to 2.77bn (2012 highs).

Ipek Ozkardeskaya at Swissquote Research comments on the impact of the data on the CHF:

"USD/CHF sold-off from 0.8953 (session high) post-data; resistance remains at 0.8957/67 (200 & 21-dma respectively). The bias in EUR/CHF remains negative yet the pressures remain subdued. Decent bids are eyed at 1.21500. The key support stands at 1.21044 (March 3rd & 2014 low)."