Daily Foreign Exchange Market Update 30/09/2011

Fri, September 30, 2011

The Pound gained a small bit of ground against the Euro, but ended practically unchanged against the US Dollar in the foreign exchange market, before falling away throughout the night. The GBP/EUR rate closed at 1.1494, up from the morning’s open at 1.1472; with the GBP/USD exchange rate trading at 1.5671 at the morning’s open but closing at 1.5676. There was some positive economic data released from the UK yesterday, with Augusts’ mortgage approvals showing a good increase; up from 49,600 to 52,400. Net consumer credit figures also showed a positive increase, from 0.3billion pounds up to 0.5 billion, suggesting that borrowing conditions for consumers are more favourable, and should benefit economic growth with more money able to flow through the economy; albeit it borrowed.

There are no significant data releases scheduled for the UK today.

The Euro lost some ground against both the Pound and the US Dollar in the currency exchange market yesterday. The EUR/USD exchange rate slipped from the morning’s open at 1.3658 to trade at 1.3636 by the end of the UK business day. There was some positive data released from Germany, in regards to the labour market with the overall unemployment rate falling from 8.0% to 7.9%, but a host of negative data in terms of Euro-zone consumer, industrial, services and economic confidence indices, which all reported drops for September saw the Euro face some pressure. With an agreement still to be reached in terms of refinancing for Greece, and also the banking sector across Europe, the currency could well come lower against the other majors.

This morning will see the release of the latest Euro-zone CPI (inflation) estimate figures, along with the Euro-zone unemployment rate; with the market expecting no change in either figure.  

The US Dollar fell against the Euro, but held a pretty narrow range against the Pound yesterday, before making a keen advance against the Pound throughout the early hours of this morning. The currency was boosted by the fact that 2^nd quarter GDP figures showed that annualized growth increased from 1.0% to 1.3%, beating the market forecast for levels closer to 1.2%; which is good news in terms of overall economic growth.

This afternoon will see the release of personal income and spending figures for August, and then the potentially market-moving University of Michigan confidence survey for September. The market forecast for the confidence survey is that of no change, but the figure could well spark some sharp trading if there is any deviation from the expectation.

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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