Daily Foreign Exchange Market Update

Mon, February 13, 2012

The Pound closed out last week having made some losses against the Euro and declined slightly against the US Dollar in the foreign exchange market. The GBP/EUR exchange rate moved down from Monday’s open at 1.2060, to close the week out down at 1.1941. The pair fluctuated in a range of 1.2098 weeks high to 1.1892 being the low across the week. The GBP/USD exchange rate declined slightly across the course of the week, starting from Monday’s open at 1.5757 the pair traded to a week high of 1.5929 before finishing the week back around the 1.5776 level.

The week ahead will see a fair amount of data released from the UK. The first significant data to look out for will be released Tuesday at 09:30 GMT, with UK Consumer Price Index y/y (Jan) expected to decrease from 4.2% to 3.6%. On Wednesday we have Jobless Claims Change expected to increase from 1.2K to 3.0K due at 09:30 GMT, followed by the Bank of England Inflation Report at 10:30 GMT. Later in the week on Friday we will Retail Sales figures due at 09:30 GMT, where economists are expecting a decline from 2.6% to 0.6%. There is no significant macroeconomic data release scheduled for the UK today.

The Euro gained across the board throughout last week in the currency exchange market. The EUR/USD rate picked up from 1.3063 at Monday’s open, to trade up at 1.3187 by the close of the European trading session on Friday. The main market focus for the week ahead in Europe will be at 10:00 GMT on Tuesday with the release of the German ZEW Survey expected at -15 up from -21.6%. On Wednesday we will keep a close eye on the German and Euro-zone Gross Domestic Product figures due at 07:00 GMT and 10:00 GMT respectively. Later in the week we will see the ECB publish their monthly report for February at 09:00 GMT on Thursday and Friday we have the German Producer prices y/y (Jan) due at 07:00.

This morning we have seen the release of German Wholesale Price Index, with the m/m figure coming in at 1.2% higher than the prior month of 0.0% and the y/y coming in at 3.0% inline with the previous month.

The US Dollar continued to slide and lose ground against the Euro and but managed to gain slightly against pound. This week’s key events to look out for will be on Tuesday with Advance Retails Sales (Jan) expected to increase from 0.1% to 0.7%. Later in the week we have Initial Jobless claims, Continuing Claims, Housing Starts, Producer Price Index and Philadelphia Fed Figures due on Thursday. Finally on Friday we will look out for the Consumer Price Index y/y (Jan) expected to decline from 3.0% to 2.8%. There is no data release scheduled from the US today.

This Daily Market Update is brought to you by The Market Team @ KBRFX – Exchange Rate, Currency Conversion & Foreign Currency Transfer specialists.

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