Daily Foreign Exchange Market Update

Fri, February 17, 2012

The Pound finished higher against the US Dollar and declined against the Euro in the foreign exchange market yesterday. The GBP/EUR exchange rate picked up from 1.2054 at the morning’s open to trade to the days high of 1.2079, before trading back down to 1.2046 by the close of the UK business day. The GBP/USD exchange rate gained near to the close of the session, with the pair opening up from 1.5673 to  trade higher at 1.5793 by the European market close. The Pound also finished slightly lower against the New Zealand Dollar and the Australian Dollar in the foreign exchange market. The GBP/NZD exchange rate picked up from 1.8972 at the morning’s open to trade down to 1.8943 by the close of the UK business day. The GBP/AUD exchange rate opened up from 1.4699 and finished the session slightly lower at 1.4673.

Yesterday we had no significant data from the UK, although today we will look out for UK Retail Sales figures due at 9:30 GMT.

The Euro gained against the pound and the US Dollar in the currency exchange market yesterday. The EUR/USD exchange opened up at 1.3001 to trade up to the day high of 1.3114 before closing out at 1.3108 by the European market close. The Euro rallied later in the session after reports that Germany’s ministry of finance does not expect any delays to the second Greek aid plan. The morning was dominated by risk averse sentiment after moody’s placed long-term debt and deposit ratings on review at 109 European banks.

Yesterday from the Euro-zone we saw Spanish GDP come in line with expectations at -0.3% and we had the release of the ECB’s monthly report, where they are expected a slowdown in 2012 GDP to 0.1% vs. 0.8% growth and for 2013 a growth forecast of 1.1% vs. 1.6%.

This morning from the Euro-zone we have seen German Producer Prices month-on-month and year-on-year figures come in better than expected. With the month-on-month figures in at 0.6% vs. expected 0.3% and year-on-year in at 3.4% vs. expected 3.2%. Today we will look out for the Euro-zone Construction Output due at 10:00 GMT.

The US Dollar declined against the Pound and the Euro currencies yesterday. Economic data from the US was fairly positive yesterday with better than expected US Initial Jobless claims coming in at 348k vs. 365k expected by economists, this is the lowest since March 2008. Also Continuing Claims for February 11^th was lower at 3426k vs. expected 3490k. Housing starts continued to rise this month as data indicated an increase from 689k to 699k

Today from the US we will look out for the 13:30 GMT US Consumer Price Index for the month of January and Leading Indicators due at 15:00 GMT where economists are expected an increase from 0.4% to 0.5%.

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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