Current Exchange Rates
|
Currency |
Current Rate |
|
|
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GBPUSD |
1.5223 |
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|
GBPEUR |
1.1046 |
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EURUSD |
1.3775 |
|
|
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||
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GBPJPY |
137.93 |
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|
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||
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GBPCHF |
1.604 |
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|
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GBPAUD |
1.6514 |
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|
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GBPCAD |
1.5401 |
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|
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GBPNZD |
2.1348 |
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|
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||
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GBPSGD |
2.1198 |
|
|
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GBPHKD |
11.814 |
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|
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GBPCZK |
28.074 |
|
|
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||
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GBPPLN |
4.2719 |
|
|
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||
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GBPSEK |
10.7801 |
|
|
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||
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GBPDKK |
8.2216 |
|
|
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GBPNOK |
8.8444 |
|
|
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GBPTHB |
49.229 |
|
|
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|
GBPZAR |
11.1470 |
|
|
|
*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
UK house prices continued to rise for the third consecutive month in January according to a report from the Department of Communities and Local Government (DCLG). House prices rose at a much faster pace in January than last year with prices rising by 6.2% following a 2.9% rise in December. Economists had only expected prices to move up by 3.5%. The news had helped to push up the value of Sterling against the Euro and Dollar.
Europe’s core inflation dropped to an all-time low in February, reaching 0.8% on the index down from 0.9% in January. The fall remained in line with the consensus forecast and has been the lowest rate since comparable reports began in 1990. According to Martin van Vliet of ING Bank the decline in core inflation in February confirms that there is still deflationary “wind” blowing across the Euro-zone. Headline inflation came in as analysts expected with a 0.3% increase in February up from a decline of 0.8% in the previous month. Annually CPI remained with a growth rate of 0.9% just as economists had expected.
Germany had some good news with the ZEW’s survey on economic sentiment showing a milder decline in sentiment from 45.1 in February to 44.5 in March, while analysts had expected the index to fall to 43.5. The ZEW survey on Germany’s current situation was also slightly better with a score of -51.9 instead of the forecast -52, and although the survey gives a negative figure it is still an improvement on February’s score of -54.8. There was also a survey by ZEW conducted on economic sentiment for the whole Euro-zone for March, which fell from 40.2 to 37.9, a lower reading than the forecast 38.5.
The US had a noticeable decline in housing starts for in February, according to a report from the US Commerce Department. The report showed that new domestic construction fell by 5.9% when the consensus had been for a drop of 3.6%. The reason for the decline was cited as the bad weather conditions that have wracked many regions of the country. The commerce department also reported a drop in building permits of 1.6% to annual rate of 612,000 in February from the January rate of 622,000. Building permits had been expected to fall to 601,000.
US import prices also fell 0.3% in February after seeing prices rise by 1.3% in January. The modest drop in import prices was attributed to fuel import prices declining by 1.9%. On an annual basis, total imports prices were up 11.2% compared to the same month a year ago. The preceding report showed an increase of 11.5%.
Later into the evening the US Federal Reserve announced that interest rates would be held at 0.25%, a historic low for the Bank which has been maintained since December 2008. The central bank sighted the weakened economy as a bigger threat than inflation and has foreseen that rates would remain low for an extended period. Lastly the weekly ABC consumer confidence survey revealed an improvement in consumer sentiment from a score of -49 in the week ending the 7th March to -43 in the week ending the 14th March.
This Wednesday morning has seen Australia’s 4th quarter dwelling starts rise by 15.1% after seeing an upwardly revised increase of 11% in the 3rd quarter. An increase in domestic dwellings is beneficial to the economy as a certain amount of investment has to be placed by building contractors and property developers, meaning that such businesses have confidence in their finances to be able to handle such monetary burdens.
The Bank of England will be releasing its minutes of their last meeting this morning, headlining today’s economic calendar. Sterling is likely to rise if the monetary authority is able to convince the markets that it has changed its posture from dovish to a wait-and-see approach. The bank came out looking dovish in February despite having paused Quantitative Easing at £200 billion, with the quarterly inflation report that served as the basis for the outcome proclaiming that “the pace of recovery is somewhat less strong than previously expected” and arguing that “it is far too soon to conclude that no more asset purchases will be needed.” With Sterling being currently undervalued, it will be necessary for the BOE to remove all doubt that they are neutral on how to adjust their monetary policy and to cast out their dovish image and only then may we see Sterling trading higher in the near term.
The rest of today’s data from the UK will revolve solely on jobs and earnings, with jobless claims expected to have risen by 6,000 in February following an increase in claims of 235,000, and the claimant count is expected to hold at a 5% increase in the number of people claiming unemployment benefits. January’s 3 month ILO unemployment rate is predicted to increase from 7.8% to 7.9%.
Looking at the UK’s annual 3-month average weekly earnings data, average earnings are forecast to rise by 1.3% after seeing 1.2% increase in the previous report. When you included bonuses, weekly earnings are predicted to rise by 1.7% when the preceding report only showed 0.8% increase. If weekly earning do increase as is suggested by economists, then Sterling will appreciate as higher earnings mean more money is spent by consumers which will drive the economy forward.
Europe’s construction sector will come under scrutiny at 10:00 GMT as January’s construction output is announced. Output in the construction sector grew by a marginal 0.5% in December and annualized report show that construction declined by 3.1%. Any increases in construction would push up the Euro's value and of course any decline would have the opposite effect. At the same time of release Europe's 4th quarter labour costs are expected to drop from an increase of 3.2% to 2.7%.
The final piece of data to come out of Europe will be Italy's current account balance for January, which in December was sitting at a deficit of 3,769,000 Euros. Any widening of the deficit would add some downward pressure on the Euro and if it narrows then the Euro will appreciate.
February's producer prices are set to fall in the US, with the consensus forecast for prices to drop by 0.2% after it rose 1.4% in January, and on an annual basis price are predicted to grow by 5.0% up from a rate of 4.6%. PPI excluding food and energy is believed to increase by a much smaller margin of 0.1% following a rise of 0.3%. The annualized core data is predicted to hold its growth trend of 1.0%.
Data Releases
|
DAY |
TIME |
CURRENCY |
EVENT |
|
|
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||||
|
WED |
09:30 |
GBP |
Bank of England Meeting Minutes |
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|
WED |
09:30 |
GBP |
Jobless Claims Change (FEB) |
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|
WED |
09:30 |
GBP |
Claimant Count Rate (FEB) |
|
|
WED |
09:30 |
GBP |
ILO Unemployment Rate (3M) (JAN) |
|
|
WED |
09:30 |
GBP |
Average Weekly Earnings inc Bonus (3MoY) (JAN) |
|
|
WED |
09:30 |
GBP |
Average Weekly Earnings ex Bonus (3MoY) (JAN) |
|
|
WED |
10:00 |
EUR |
Euro-Zone Construction Output s.a. (MoM) (JAN) |
|
|
WED |
10;00 |
EUR |
Euro-Zone Construction Output w.d.a. (YoY) (JAN) |
|
|
WED |
10:00 |
EUR |
Euro-Zone Labor Costs (YoY) (4Q) |
|
|
WED |
10:05 |
EUR |
Italian Current Account (euros) (JAN) |
|
|
WED |
11:00 |
USD |
MBA Mortgage Applications (MAR 12) |
|
|
WED |
12:30 |
USD |
Producer Price Index (MoM) (FEB) |
|
|
WED |
12:30 |
USD |
Producer Price Index (YoY) (FEB) |
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|
WED |
12:30 |
USD |
Producer Price Index Ex Food & Energy (MoM) (FEB) |
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|
WED |
12:30 |
USD |
Producer Price Index Ex Food & Energy (YoY) (FEB) |
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|
WED |
14:30 |
USD |
DOE U.S. Crude Oil Inventories (MAR 12) |
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|
WED |
14:30 |
USD |
DOE U.S. Gasoline Inventories (MAR 12) |
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|
WED |
14:30 |
USD |
DOE U.S. Distillate Inventory (MAR 12) |
|
|
WED |
20:00 |
USD |
Fed's Richard Fisher to Speak on Panel on 'Learning' from Crisis |
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Personal: 0800 8778 477
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KBR Foreign Exchange PLC
Riverside Business Centre
Fort Road
Tilbury
RM18 7ND