Current Exchange Rates
|
Currency |
Current Rate |
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|
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GBPUSD |
1.5793 |
|
|
|
||
|
GBPEUR |
1.1461 |
|
|
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EURUSD |
1.3776 |
|
|
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||
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GBPJPY |
142.64 |
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|
|
||
|
GBPCHF |
1.6829 |
|
|
|
||
|
GBPAUD |
1.7497 |
|
|
|
||
|
GBPCAD |
1.6460 |
|
|
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||
|
GBPNZD |
2.2328 |
|
|
|
||
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GBPSGD |
2.2135 |
|
|
|
||
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GBPHKD |
12.266 |
|
|
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||
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GBPCZK |
29.671 |
|
|
|
||
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GBPPLN |
4.563 |
|
|
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||
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GBPSEK |
11.2824 |
|
|
|
||
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GBPDKK |
8.5295 |
|
|
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||
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GBPNOK |
9.219 |
|
|
|
||
|
GBPTHB |
52.25 |
|
|
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||
|
GBPZAR |
12.0799 |
|
|
|
*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
Yesterday's UK CPI data showed that annual inflation rose by 3.5% in January from December's 2.9%. The annual rate matched economists' expectations and was the highest since November 2008. The Office of National Statistics has placed the increase in VAT as the reason for the movement in the consumer price index. Month-on-month the CPI fell 0.2% in January, while economists had expected it to fall 0.1%. Although negative, January's figure was the strongest ever CPI growth between these two months. Core inflation that strips out energy, food, alcohol and tobacco came in at 3.1% on a yearly basis, following December's 2.8%. Consensus forecast was for 3.2%.
As annual inflation exceeded the 2% target, Mervyn King, the Bank of England Governor, wrote an open letter to the Chancellor of the Exchequer. King's letter stated three short-run factors that raised the current measured rate of inflation. The restoration of the VAT to 17.5% and about 70% increase in oil prices pushed inflation higher. Further, the effects of a sharp depreciation of Sterling in 2007 and 2008 continued to feed through to consumer prices. The Monetary Policy Committee expects deviation in inflation from the target as temporary and thereafter, inflation will be determined by the growth rate of nominal spending relative to the supply capacity of the economy.
Europe saw bad news yesterday when ZEW said its economic sentiment indicator for Germany decreased 2.1 points to 45.1 in February. Economists had forecast a reading of 41, down from 47.2 recorded in January. The sentiment indicator fell for a fifth month in February. On a slightly more positive note, the current economic situation in Germany improved slightly in February. The corresponding indicator rose by 1.8 points to minus 54.8 points, while the consensus was minus 53. The current assessment component increased for the ninth consecutive month to its highest level since November 2008. Further ZEW's economic expectations index for the euro area decreased considerably in February by 6.2 points. The corresponding indicator is now at 40.2 points.
Overall the US faired better than Europe with Empire manufacturing growing from 15.92 in January to 24.91 in February. Total Net TIC Flows saw increased trade surplus reaching $60.9 Billion in December when the consensus had been for a surplus of only $50 billion. More good news came in the form of the NAHB Housing Market Index which increased by 2 points to hit a score of 17 over January's score of 15. Economists had only expected a score of 16. The only blemish on the US calendar was a slight drop in consumer confidence. According to ABC's report sentiment fell by 1 point from -48 to -49 for the week of 14th February. Overall the data had been bullish for the US Dollar.
The UK’s calendar will see some important reports today. The minutes to the Bank of England’s last meeting will be released; however it is likely to be overlooked as traders have had considerable time to price in their BOE outlook after the central bank released its quarterly inflation report last week.
UK Employment data is expecting to see the claimant count, the number of unemployed individual’s who are actively seeking work, to remain at 5.0% in January as it was in December. Jobless claims, if economist expectations are to be correct, should fall by 10,000 in January after December saw a larger drop of 15,200. This will be the third consecutive month that claims have fallen. The ILO unemployment rate, which is the percentage of persons willing to work and are actively seeking employment but are without jobs, is expected to hold at 7.8% in December, the same level as was seen in the previous report. Lastly weekly earning inclusive of bonuses is expected to increase from 0.7% to 0.9% in the 4th quarter, whereas weekly earnings that are exclusive of bonuses are expected to remain at 1.1%. Lower unemployment will see Sterling gain strength over the other currencies, similarly increases in weekly earning will also boost the value of Sterling as higher earnings means more money to spend on consumables.
December’s construction output for the Euro-zone is due for release this morning. No expectations have been given as to what the figure is likely to be, but an increase in output after November saw the construction sector contract by 1.1%, will see the Euro strengthen. The annualized figure showed previously that construction output had contracted by 0.8%, again if output increases then the Euro will strengthen but any further contraction in this sector will result in the Euro weakening. Further data from the Euro-zone will be in the form of Trade Balance data which is expecting to see a trade surplus of €5billion in December when November had seen a lower surplus of €4.8billion. Increases in trade surplus are beneficial to any economy, so should these predictions come true then the Euro will appreciate in value. The last piece of European data will be the Italian Current Account for the month of December. November showed a deficit of 4,570. Should this deficit widen in December then this will be bad new for the Euro, however if it narrows or we see a surplus then the Euro will appreciate.
Today’s US calendar is going to be a lengthy one. The American data will open up with Mortgage Applications from the week 12th February. Economists have not given any predictions but an increase in applications, after the previous week saw a decline of 1.2%, will be beneficial to the Dollar. January’s housing starts expected to be on the increase reaching a figure of 580,000 after December saw an increase of 557,000. Building permits are expected to increase at a slower pace with 620,000 new permits in January compared to the 653,000 permits that were given in December. Increases in permits and housing starts will see the Dollar strengthen.
Along side building permits and housing starts, the US will announce their Import Price Index (IPI) for January. Month-on-month January is expected to see the index increase by 0.8% after remaining unchanged in December. The annualized data is likely to see a continued increase from December’s 8.6% rise in prices to 10.7% in January. Positive figures for US IPI help appreciate the value of the Dollar as this is indicative of demand for US goods, should the headline figure drop below expectations then the Dollar will not appreciate.
Keeping with US data, January's Capacity utilization is set to rise from 72% in December to 72.6% in the month of January. Released along side it, industrial production is cited to increase by 0.8% in January over December's 0.6% gain in production. Growth in the industrial sector is beneficial to the economy and should the headline figure hit or go beyond analyst's expectations then expect the Dollar to appreciate in value.
Data Releases
|
DAY |
TIME |
CURRENCY |
EVENT |
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|
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|
WED |
09:30 |
GBP |
Bank of England Meeting Minutes |
|
|
WED |
09:30 |
GBP |
Jobless Claims Change (JAN) |
|
|
WED |
09:30 |
GBP |
Claimant Count Rate (JAN) |
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|
WED |
09:30 |
GBP |
ILO Unemployment Rate (3M) (DEC) |
|
|
WED |
09:30 |
GBP |
Weekly Earnings inc Bonus (3MoY) (DEC) |
|
|
WED |
09:30 |
GBP |
Weekly Earnings ex Bonus (3MoY) (DEC) |
|
|
WED |
10:00 |
EUR |
Euro-Zone Construction Output s.a. (MoM) (DEC) |
|
|
WED |
10:00 |
EUR |
Euro-Zone Construction Output w.d.a. (YoY) (DEC) |
|
|
WED |
10:00 |
EUR |
Euro-Zone Trade Balance s.a. (euros) (DEC) |
|
|
WED |
10:00 |
EUR |
Euro-Zone Trade Balance (euros) (DEC) |
|
|
WED |
10:05 |
EUR |
Italian Current Account (euros) (DEC) |
|
|
WED |
12:00 |
USD |
MBA Mortgage Applications (FEB 12) |
|
|
WED |
13:30 |
USD |
Housing Starts (JAN) |
|
|
WED |
13:30 |
USD |
Housing Starts (MoM) (JAN) |
|
|
WED |
13:30 |
USD |
Building Permits (JAN) |
|
|
WED |
13:30 |
USD |
Building Permits (MoM) (JAN) |
|
|
WED |
13:30 |
USD |
Import Price Index (MoM) (JAN) |
|
|
WED |
13:30 |
USD |
Import Price Index (YoY) (JAN) |
|
|
WED |
14:15 |
USD |
Industrial Production (JAN) |
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|
WED |
14:15 |
USD |
Capacity Utilization (JAN) |
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|
WED |
17:45 |
USD |
Fed's Plosser Speaks in Philadelphia on Financial Crisis |
|
|
WED |
19:00 |
USD |
Federal Open Market Committee Meeting Minutes |
|
|
WED |
21:30 |
USD |
API U.S. Crude Oil Inventories (FEB 12) |
|
|
WED |
21:30 |
USD |
API U.S. Gasoline Inventories (FEB 12) |
|
|
WED |
21:30 |
USD |
API U.S. Distillate Inventory (FEB 12) |
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KBR Foreign Exchange PLC
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RM18 7ND