Daily Foreign Exchange Market Update 27/09/2011

Tue, September 27, 2011

The Pound managed to claw back some ground in the foreign exchange market yesterday, by closing higher against both the Euro and the US Dollar. The GBP/EUR exchange rate which opened at 1.1506 did fall slightly during the day but closed up at 1.1517; with the GBP/USD exchange rate climbing throughout the day from 1.5451 to 1.5542 by the end of the UK trading day. There was no significant economic data released from the UK yesterday, with the currency gaining on further turbulence in Europe, and some weak data released from the US.

The sole piece of economic data to be released from the UK today is the CBI reported sales number for September, with the market forecast for a drop in the index from -14 to -15.

The Euro lost ground against the Pound, but gained on the US Dollar yesterday. The currency exchange market saw the Dollar face some pressure in light of poor economic data released from the nation, with the EUR/USD exchange rate moving up from 1.3416 at the market open; to trade up at 1.3494 by the end of the day. Yesterday saw the release of September’s German IFO figures for business climate, current assessment, and expectation figures; with all the indices showing a slight decrease, but reading better than the market forecast.

This morning has already seen the release of October’s German GfK consumer confidence survey; which showed no change in the reading of 5.2 amid calls for negative sentiment to increase, and the reading to drop down to 5.0. This is positive news for the Euro currency, taking into consideration the current market speculation over the involvement the European Central Bank may have in helping Greece, and the Euro-zone overall in funding it’s debts; which may not be taken positively by residents of the ‘stronger’ European nations.

The US Dollar lost ground against both the Euro and the Pound yesterday; with disappointing results from both the Chicago National Activity Index, which fell in August from -0.06 down to 0.43, and new home sales for August dropping from 302,000 down to 295,000, the month-on-month percentage level falling from -0.3% to -2.3%.

The US currency may face further headwinds today; with the release of September’s consumer confidence figures. The market forecast is for an increase in positive sentiment; but with a weak housing and labour market as well as slight drops in personal spending and retail sales figures; there is the possibility for a surprise in this reading. The figure will be released at 3:00pm UK time, and may cause some very sharp movements in the market.

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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