Foreign Exchange Business Foreign Exchange Personal Foreign Exchange Partners

Daily Foreign Exchange Market Update 07/10/2011

Fri, October 07, 2011

The Pound finished yesterday lower against both the Euro and the US Dollar in the foreign exchange market. The GBP/EUR exchange rate dropped throughout the day, from 1.1579 at the morning’s open; down to 1.1484 by the market close. The GBP/USD exchange rate also fell, from 1.5445 down to 1.5402 by the end of the UK business day. The key event of yesterday from the UK was the Bank of England’s (BoE) decision to add an extra £75bn to its asset purchase programme. With growth figures for the first two quarters of this year being revised downwards, and household spending at its lowest level for a decade, the feeling is that the central bank had to act immediately to try and head off the risk that the UK economy will fall back into recession. There is a risk however, that by engaging in a further round of quantitative easing, the BoE will be creating additional inflationary pressure, which could have a damaging effect on spending.

This morning will see the release of Septembers PPI figures from the UK, with the market forecast for the annual core output level to have risen slightly, which would indicate that price-growth (inflation) could be set to rise also.

The Euro gained ground against both the Pound and the US Dollar yesterday in the currency exchange market. The EUR/USD exchange rate moved up across the course of the day; from 1.3337, to trade at 1.3409 by the UK market close. German factory orders figures release yesterday showed that annually the index level fell sharply, from 8.9% to 3.9%, but there was a slight increase in the monthly level; from -2.6% to -1.4%. Like the UK though, the main market focus was on the European Central Bank’s (ECB) policy meeting. The central bank announced no change in the base interest rate, but that it will be offering new emergency loans to banks in the Euro-zone, with the intention to help the region’s banks during the government debt crisis. At his last rate-meting before being replaced by Mario Draghi, President Trichet stopped short of announcing any rate cuts, but warned that ‘’The economic outlook remains subject to particularly high uncertainty and intensified downside risks’’.

Today will see the release of German industrial production figures for august, and are unlikely to be positive; with the market forecast for a drop in both the annual and monthly level; which could put pressure on the Euro, with Germany being one of the strongest member states, and relying heavily on it’s industrial sector.

The US Dollar pulled back against the Pound, but lost ground against the Euro yesterday. There were no significant release in terms of economic data from the US yesterday, with the currency benefitting against the Pound due to the Bank of England’s stimulus package which effectively confirmed that the UK economy will be unable to recover without additional monetary help.

Today will be a different story for the US, with the release of some very important figures. Non-farm payroll figures for September will be released this afternoon, along with the latest unemployment rate figures. The market forecast is for no change in the overall unemployment rate, and in regards to the non-farm figures – the expectation is to see an addition of 50,000, but with the figure renowned for being notoriously hard to predict, there could well be some sharp movements for the Dollar.

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

Data Releases

Day Time Currency Event
FRI 07:45 EUR EUR French Central Government Balance (euros)
FRI 07:45 EUR EUR French Trade Balance (euros)
FRI 09:30 GBP GBP Producer Price Index Input n.s.a. (MoM)
FRI 09:30 GBP GBP Producer Price Index Input n.s.a. (YoY)
FRI 09:30 GBP GBP Producer Price Index Output n.s.a. (MoM)
FRI 09:30 GBP GBP Producer Price Index Output n.s.a. (YoY)
FRI 09:30 GBP GBP Producer Price Index Output Core n.s.a. (MoM)
FRI 09:30 GBP GBP Producer Price Index Output Core n.s.a. (YoY)
FRI 11:00 EUR EUR German Industrial Production n.s.a. and w.d.a. (YoY)
FRI 11:00 EUR EUR German Industrial Production s.a. (MoM)
FRI 13:30 USD Avg Weekly Hours All Employees
FRI 13:30 USD USD Change in Non-farm Payrolls
FRI 13:30 USD USD Change in Private Payrolls
FRI 13:30 USD USD Change in Manufacturing Payrolls
FRI 13:30 USD USD Unemployment Rate
FRI 13:30 USD Average Hourly Earning (MoM)
FRI 13:30 USD Average Hourly Earning (YoY)
FRI 13:30 USD USD Change in Household Employment Survey
FRI 15:00 USD USD Wholesale Inventories
FRI 15:55 USD USD Fed's Lockhart Speaks on Economy in Atlanta
FRI 20:00 USD USD Consumer Credit

Foreign Exchange Rates

GBP/USD 1.5515
GBP/EUR 1.1536
EUR/USD 1.3444
GBP/JPY 118.87
GBP/CHF 1.4269
GBP/AUD 1.5820
GBP/CAD 1.6109
GBP/NZD 2.0036
GBP/SGD 2.0075
GBP/HKD 12.0754
GBP/CZK 28.485
GBP/PLN 5.0417
GBP/SEK 10.5530
GBP/DKK 8.5885
GBP/NOK 9.0230
GBP/THB 47.94
GBP/ZAR 12.3244

*These are indicative rates only, based on interbank prices at the time of writing. For exact rates please contact our dealing team

October 2011
S M T W T F S
25 26 27 28 29 30 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 1 2 3 4 5
RSS Feed

Please subscribe to our FREE foreign exchange market update feed.

Cookies On The KBRFX Website

We use cookies on our website. They help us to know a little bit about you & how you use our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on our website. However, if you would like to, you can change your cookie settings at any time.

Continue Find out more