Current Exchange Rates

Currency	Current Rate
GBPUSD	1.5573
GBPEUR	1.1315
EURUSD	1.3760
GBPJPY	140.16
GBPCHF	1.6607
GBPAUD	1.7529
GBPCAD	1.6484
GBPNZD	2.2247
GBPSGD	2.1984
GBPHKD	12.102
GBPCZK	29.419
GBPPLN	4.577
GBPSEK	11.2996
GBPDKK	8.4249
GBPNOK	9.1757
GBPTHB	51.5999
GBPZAR	11.9494

*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

The UK saw industrial production expand by 0.5% from November’s increase of 0.4%. It had been expected that industrial production would slow in its pace to only an increase of 0.2%. The year-on-year data showed a slowing in the pace of decline with production falling by 3.6% as opposed to the 4.1% drop that economists had expected. Manufacturing was also up with a 0.9% increase over November’s upwardly revised 0.2% increase. The year-on-year data followed the same suit as the annual industrial data with a slow down in its decline from 4.9% to 1.9% drop in production. Expectations had been for a 3.0% contraction.

The Headline of yesterday’s UK calendar was the BoE quarterly inflation report, which said the economic growth of Britain is set to reach around 3.2% in the second quarter of next year, a smaller estimate than the previous one of 4% growth. The outlook for inflation was higher in the near term than in November’s report. The BoE expects inflation to peak at 3.3% before slowing to 0.9%. The inflation report looked dovish and questions will be raised as to why the quantitative easing programme was not extended. Jonathan Loynes, Chief European Economist for Capital Economics said “The clear message [from the report] is that further policy support may yet be needed”.

Yesterday’s US data saw mortgage applications fall by 1.2% from the previous report of applications increasing by 21%. Further bad news came from the trade balance data which saw a wider deficit of $40.2billion from November’s deficit of $36.4Billion. Economists had expected the deficit to shrink to $35.8billion. Overall this data would put downward pressure on the value of the US Dollar.

This morning Australia saw employment figures for January increase by 52,700 after December saw an upwardly revised increase of 37,500 employed individuals. It was expected that the number employed would only increase by 15,000. The Unemployment rate fell to 5.3% in January after December saw 5.5% increase in the number of unemployed. January’s unemployment was expected to see a figure of 5.6% so this smaller figure, the lowest level in 11 months, is bullish for the Aussie Dollar. Full time employment rose by 15,900 up from 7,300 jobs in December and Part-time employment saw increase of 36,900 jobs from 30,200 in previous month. Lastly the participation rate, which is the percentage of the total Australian population who are actively seeking work (whether already employed or not), remained at 65.3% after December’s figures were upwardly revised to the same level. The overall employment data for Australia is very positive so this will be bullish for Australian dollar.

German wholesale price index rose 1.9% in January from the same period of last year. This is larger than the 0.2% increase seen in December. On a monthly basis the index climbed by 1.3% compared to December’s 0.2% rise.

Looking ahead the European Central Bank will be publishing their Monthly Report. Also referred to as the the Monthly Bulletin, this report contains a detailed analysis of the prevailing economic situation and the risks to price stability. The report is likely to be overlooked by trades as the EU convene to consider a rescue package for Greece as it struggles with its public deficit, the largest in the whole Euro-zone.

Advance Retails sales and Retail Less Autos with take centre stage in the US calendar today. Retail sales are expected to see an increase of 0.3% in January after December had seen a fall in sales of 0.3%. Sales less automotive sales is expected to pick up with a 0.4% increase falling a fall in sales of 0.2% in December. Should economists see their expectations come true then we will see further strengthening of the US dollar, however show sales continue to decline such as was seen in December then the Dollar will lose value.

US initial jobless claims are expected to fall from 480,000 to 456,000 in the week of February 6th. Continuing claims are expected to be released along side initial claims but no expectations have been given as to what the headline figure will be upon release. Suffice to say continuing claims should fall in a healthy economy, so if the figure is released as being higher than the previous week’s figure of 4,602K claims then this will be bearish for the Dollar.

Lastly US business inventories, in the month of December, are expected to build up at same pace as November at 0.4%. A difficult figure to analyze and much less influential than the Advance retail sales, but when paired up with total sales figures it becomes fairly useful. Rising inventories and a slackening of sales are indicative of economic troubles and thus is bad for the value of the dollar. On the other hand falling inventories and and increased retail sales show an improvement in the economy and is bullish for the Dollar.

Data Releases

DAY	TIME	CURRENCY	EVENT
THU	09:00	EUR	European Central Bank Publishes Monthly Report
THU	13:30	USD	Advance Retail Sales (JAN)
THU	13:30	USD	Retail Sales Less Autos (JAN)
THU	13:30	USD	Retail Sales Ex Autos & Gas (JAN)
THU	13:30	USD	Initial Jobless Claims (FEB 6)
THU	13:30	USD	Continuing Claims (JAN 30)
THU	15:00	USD	Business Inventories (DEC)

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