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Daily Foreign Exchange Market Update 13/10/2011

Thu, October 13, 2011

The Pound finished the day almost unchanged against the Euro, but higher against the US Dollar in the foreign exchange market yesterday. The GBP/EUR exchange rate which opened at 1.1413, closed the day out at 1.1413; with the GBP/USD exchange rate picking up from 1.5623 at the morning’s open, to trade up at 1.5761 by the end of the UK business day. Economic data released from the UK yesterday was negative overall, and fully-focused on the labour market. Figures showed that the claimant count rate for September increased from 4.9% to 5.0%, and that the overall unemployment rate in the UK for the 3 months to August rose from 7.9% to 8.1%; the worst level seen in the UK since 1996.

This morning will see the release of the UK’s trade balance figure for August; which is expected to reinforce the UK’s huge trade deficit; as a result of the massive difference between the volumes of imported goods as compared to the volume of exported goods.

The Euro gained against the US Dollar yesterday, but finished about the same against the Pound in the currency exchange market. The EUR/USD exchange rate picked up across the day, from 1.3688 at the morning’s open, to trade up at 1.3809 by the market close. There was some unexpected positive data released form Europe, with Augusts’ Euro-zone industrial production figures showing an upturn in both the annual and monthly levels; from 4.4% to 5.3%, and from 1.1% to 1.2% respectively. This did help the Euro currency, as the stronger European member states such as Germany are reliant on industry for economic stability and growth.

Today has already seen the release of the ECB’s monthly report for October; which was in no way positive for the Euro-zone. The report stated that growth in the Euro region would remain ‘moderate’ for the rest of the year, that there are ‘increasing downside risks’ and also that inflation will remain ‘clearly above 2.0%’ for the time being.

The US Dollar fell against both the Euro and the Pound yesterday, and the currency was probably not helped by release of the minutes from the Federal Reserve’s last policy meeting, which showed that 2 policy-makers voted for extra monetary stimulus as they felt that the weak economy justified the addition of more funding. The minutes also showed that 3 policy-makers voted against the shifting of $400 billion towards extending the maturity date of the central bank’s security holdings, the largest dissent majority seen by an FOMC voting board in over 20 years. In terms of growth, the minutes stated that the Fed sees a ‘bleak economic outlook’ and there are ‘significant downside risks’ to future growth.

This afternoon will see the release of the latest trade balance numbers from the US. Like the UK, the US has a fairly large trade deficit; and the market forecast is for the latest reading to show a bigger increase in the gap between import and export activity.

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
THU 07:00 EUR EUR German Consumer Price Index (MoM)
THU 07:00 EUR EUR German Consumer Price Index (YoY)
THU 07:00 EUR EUR German Consumer Price Index - EU Harmonised (MoM)
THU 07:00 EUR EUR German Consumer Price Index - EU Harmonised (YoY)
THU 09:00 EUR EUR ECB Publishes Oct. Monthly Report
THU 09:30 GBP GBP Visible Trade Balance (Pounds)
THU 09:30 GBP GBP Trade Balance Non EU (Pounds)
THU 09:30 GBP GBP Total Trade Balance (Pounds)
THU 13:30 USD USD Continuing Claims
THU 13:30 USD USD Trade Balance
THU 13:30 USD USD Initial Jobless Claims
THU 14:45 USD USD Bloomberg Consumer Comfort
THU 15:30 USD USD DOE U.S. Crude Oil Inventories
THU 15:30 USD USD DOE Cushing OK Crude Inventory
THU 15:30 USD USD DOE U.S. Distillate Inventory
THU 15:30 USD USD DOE U.S. Gasoline Inventories

Foreign Exchange Rates

GBP/USD 1.5682
GBP/EUR 1.1408
EUR/USD 1.3743
GBP/JPY 120.74
GBP/CHF 1.4073
GBP/AUD 1.5450
GBP/CAD 1.6029
GBP/NZD 1.9790
GBP/SGD 2.0038
GBP/HKD 12.1976
GBP/CZK 28.162
GBP/PLN 4.9166
GBP/SEK 10.4189
GBP/DKK 8.4909
GBP/NOK 8.8542
GBP/THB 48.31
GBP/ZAR 12.3103

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

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