Current Exchange Rates

Currency	Current Rate
GBPUSD	1.4903
GBPEUR	1.1045
EURUSD	1.3486
GBPJPY	132.70
GBPCHF	1.6167
GBPAUD	1.6563
GBPCAD	1.551
GBPNZD	2.1437
GBPSGD	2.0953
GBPHKD	11.5714
GBPCZK	28.507
GBPPLN	4.340
GBPSEK	10.7609
GBPDKK	8.2252
GBPNOK	8.9098
GBPTHB	48.84
GBPZAR	11.4155

*These are indicative rates only, based on interbank prices at the time of writing. For exact rates please call our dealing team on +44 (0)1375 489 480

Market Overview

Monday saw Sterling take a massive fall against the Dollar and Euro. The Dollar forced back Sterling to see a low rate of 1.4780 the lowest rate to be seen since May of last year. Against the Euro, Sterling fell to a low of 1.0925. Sterling's fall was aided by a drop in UK mortgage approvals which fell from 58,200 in December to 48,200 in January, missing analysts' expectations of only seeing 50,000 approvals. M4 money supply rose 0.4% month-on-month in January, following a 0.6% increase in December. On an annual basis, M4 money supply grew 4.9% in January, slower than December's 5.1% rise. The only positive for Monday’s UK data was for Net consumer credit to increase by £0.5B from £0.3B in December. Analyst had expected consumer credit to decline by £0.1B.

The Euro gained ground through German importer prices which, month-on-month rose from 0.5% to 1.7% in January and German manufacturing PMI seeing a slight increase from 57.1 to 57.2 in February. Euro-zone unemployment data also helped the Euro along as the unemployment rate remained stable at 9.9% in January, unchanged from December’s revised rate. Economists had forecasted unemployment to rise to 10.1%.

The US saw personal consumption remain stable at 2.1% in January’s annualised data, with core expenditure showing no growth for January, just as was forecast by analysts. The annualised report for core expenditure also remained within expectations showing a slightly slower 1.4% growth compared to the previous report’s 1.5% increase. US ISM manufacturing fell by 1.9 points to give a reading of 56.5 in February from January’s 58.4 reading. The consensus had been for a milder decline to 57.9. Overall Monday’s US data has come out as expected or showing a slight decline, so there were no major drawbacks for the US economy.

Tuesday morning has witnessed Australia’s retails sales data for January rise by 1.2% after it fell by a revised 0.9% in December. The consensus had been for retail sales to increase by 0.4% from the original 0.7% drop in sales that was report in December. January’s building approvals saw a decline of 7.0% following an increase of 5.2% in December. Economists had predicted for approvals to rise by 1.0%, so today’s data would be considered quite a shock. Year-on-year approvals have seen an increase of 47.6% compared to the prediction of 59.8% that economists gave. The previous figure had seen a faster pace of increase with 53.3% growth. Lastly the Reserve Bank of Australia announced that they would raise the key interest rate to 4%, in line with analysts’ expectations and proving to the market that Australia’s economy is still going strong.

Looking ahead to the rest of the day, the UK continues the economic calendar with the construction sector’s Purchasing Manager Index (PMI) for February. The index is expected to show a reading of 48.9 after January’s index read at 48.6. An increase in the index would add some value to the Pound, although this piece of economic data doesn’t carry much weight, so expect its effects to be small.

Italian consumer price index data starts off the Euro-zone’s economic calendar. CPI inclusive of tobacco prices is expected to see a marginal increase of 0.2% for February month-on-month and annually economists predict an increase of 1.3%. The EU harmonized CPI is also expected to grow by 0.2% and likewise the annual data is predicted to show a 1.3% increase as well. Although Italian CPI is not considered heavily influential on the currency market, a collective increase in CPI within or above analyst predictions would see the Euro appreciate.

Euro data continues with CPI for the whole Euro-zone. The annual CPI estimates for February should see a slightly slower pace of increase with 0.9% growth compared to the previous data’s increase of 1.0% increase. Month-on-month producer prices are expected to pick up the pace of increase from 0.1% to 0.6%. The annualized PPI data on the other hand is expected to show a slower pace of decline from -2.9% to -1.1%. An increase in CPI and PPI would add value to the Euro as inflationary pressure increases the need for the ECB to raise interest rates to curb inflation, and higher interest rates are more attractive to foreign investors.

The US calendar will be devoid of anything that would have any great effect on the market. The weekly confidence report from ABC will be announced this afternoon and an increase from the previous week's figure of -50 would add some value to the Dollar. February's domestic vehicle sales is expected to fall from 8.19 million sales to 8.0 million and total vehicle sales is also expected to see a similar decline of 10.50 million from 10.82 million in January. Declines in expensive purchases such as vehicles are not good for the economy as it shows consumers are not confident in their financial situation to afford additional monthly payments.

Data Releases

DAY	TIME	CURRENCY	EVENT
TUE	09:30	GBP	Purchasing Manager Index Construction (FEB)
TUE	10:00	EUR	Italian Consumer Price Index (NIC incl. tobacco) (MoM) (FEB P)
TUE	10:00	EUR	Italian Consumer Price Index (NIC incl. tobacco) (YoY) (FEB P)
TUE	10:00	EUR	Italian Consumer Price Index - EU Harmonized (MoM) (FEB P)
TUE	10:00	EUR	Italian Consumer Price Index - EU Harmonized (YoY) (FEB P)
TUE	10:00	EUR	Euro-Zone Consumer Price Index Estimate (YoY) (FEB)
TUE	10:00	EUR	Euro-Zone Producer Price Index (MoM) (JAN)
TUE	10:00	EUR	Euro-Zone Producer Price Index (YoY) (JAN)
TUE	18:00	USD	Fed's Kocherlakota Speaks at Minneapolis Symposium
TUE	21:30	USD	API U.S. Crude Oil Inventories (FEB 26)
TUE	21:30	USD	API U.S. Gasoline Inventories (FEB 26)
TUE	21:30	USD	API U.S. Distillate Inventory (FEB 26)
TUE	22:00	USD	ABC Consumer Confidence (FEB 28)
TUE	22:00	USD	Domestic Vehicle Sales (FEB)
TUE	22:00	USD	Total Vehicle Sales (FEB)

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KBR Foreign Exchange PLC

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Tilbury

RM18 7ND