Daily Foreign Exchange Market Update

Thu, February 16, 2012

The Pound gained a fair amount against the US Dollar and the Euro in the foreign exchange market yesterday. The GBP/EUR exchange rate picked up from 1.1911 at the morning’s open to trade up to the days high of 1.2012 before trading back down to 1.2000 by the close of the UK business day. The GBP/USD exchange rate opened up in the morning from 1.5677 before trading in a range of 1.5722 and 1.5668 throughout the session and closed the day with a slight gain up at 1.5706 by the European market close. Yesterday we had Jobless Claims Change figures come in worst than expected from the UK, the data showed that number of claimants increased to 6.9k vs 1.9k from the prior month. There is no other scheduled data release from the UK today.

The Euro declined across the board especially against the Pound and the US Dollar in the currency exchange market yesterday. The EUR/USD exchange rate started the day opening up from 1.3159, to then trade up to the day high of 1.3183 before closing out the day lower at 1.3086 by the European market close. Yesterday we saw the German Gross Domestic Product n.s.a. (y/y) fall slightly short of expectations at 1.5% vs 1.8%, indicating a slight slow down in growth. However Euro-zone Gross Domestic Product came in line with expectations at 0.7% but still down across the year from 1.3%.

This morning from the Euro-zone we have seen Spanish GDP come in line with expectations at -0.3%. Also we had the ECB publish their monthly report, where they are expecting a slowdown in 2012 GDP to 0.1% vs. 0.8% growth and for 2013 a growth forecast of 1.1% vs. 1.6%. Today we have the Italian Trade Balance and Current Account figures due at 10:00 Gmt.

The US Dollar declined against the Pound, but managed to gain significantly against the Euro currencies yesterday. Economic data from the US was fairly mixed yesterday with better than expected US Empire Manufacturing for the month of (Feb) coming in at 19.53 vs. 15.00 expected by economists; however Industrial production for the month of (Jan) came in worse than expected at 0.0% vs. 7.0% and down from the prior month of 1.0%.

Today from the US we will look out for the 13:30 Gmt US Producer Price Index (y/y)  for the month of January, also we have the US Housing Starts and Building permits also due at 13:30 Gmt.  Later in the day at 14:00 Gmt we have Fed’s Bernanke speaking on Community Banking in Arlington.

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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