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Daily Foreign Exchange Market Update 21/10/2011

Fri, October 21, 2011

The Pound finished yesterday higher once again against both the Euro and the US Dollar in the foreign exchange market. The GBP/EUR exchange rate picked up throughout the day from 1.1468 at the morning’s open to trade up at 1.1501 by the close of the UK business day. The GBP/USD exchange rate didn’t show as much gain, with the morning’s open level at 1.5726 closing at 1.5731 following some choppy trading across the day. There was some positive news from the UK yesterday, with September’s retail sales showing a positive increase, both annually and month-on-month, picking up from -1.0% to +0.4% and from -0.4% to +0.4% respectively.

This morning has already seen the release of public sector net borrowing figures for September, which showed an increase, from the previous month’s level of £10.9billion to £11.4billion. Public finance figures also showed an increase in the amount of money financed to the UK government, from £11.8billion to £19.9billion.

The Euro lost ground against both the Pound and the US Dollar in the currency exchange market yesterday; amid further fears that a solution for bank refinancing and the sovereign debt woes across the region may not be reached. The EUR/USD exchange rate pulled back across the course of the day, from 1.3712 at the morning’s open to trade at 1.3676 by the day’s close. Economic data released yesterday showed that Euro-zone consumer confidence fell in October, as expected; from -19.1 to -19.9. German producer price figures for September showed no change in the annual level of 5.5%, with prices increasing month-on-month; from -0.3% to +0.3%.

Today we have already seen the release of German IFO numbers, with the business climate reading for October falling from 107.4 to 106.4, the current assessment level also declining; from 117.9 to 116.7 and the expectations figure falling; from 97.9 to 97.0. Later on today the market will look to Euro-zone government debt to GDP ratio figures being released. The market forecast is for a level of around 85.1%.

The US Dollar regained some ground against the Euro yesterday, but fell overall against the Pound. There was negative data released from the US yesterday, with existing home sales figures falling in September, from 5.06 million to 4.91 million; but there was some positive news with Octobers Philadelphia Fed Index showing an increase, from -17.5 to +8.7, which was way above market expectations.

There are no scheduled economic data releases from the US today, leaving the currency open to shifts in risk sentiment and news from the world’s other major economies.

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 Own-Company Production Outlook
FRI 07:45 EUR EUR French Production Outlook Indicator
FRI 07:45 EUR EUR French Business Confidence Indicator
FRI 09:00 EUR EUR German IFO - Expectations
FRI 09:00 EUR EUR German IFO - Business Climate
FRI 09:00 EUR EUR German IFO - Current Assessment
FRI 09:30 GBP GBP Public Finances (PSNCR) (Pounds)
FRI 09:30 GBP GBP Public Sector Net Borrowing (Pounds)
FRI 09:30 GBP GBP PSNB ex Interventions
FRI 10:00 EUR EUR Euro-Zone Government Debt-GDP Ratio
FRI 18:00 USD USD Fed's Kocherlakota Speaks in Minneapolis

Foreign Exchange Rates

GBP/USD 1.5794
GBP/EUR 1.1483
EUR/USD 1.3747
GBP/JPY 121.00
GBP/CHF 1.4060
GBP/AUD 1.5426
GBP/CAD 1.6056
GBP/NZD 1.9923
GBP/SGD 2.0166
GBP/HKD 12.2822
GBP/CZK 28.7220
GBP/PLN 5.0450
GBP/SEK 10.4389
GBP/DKK 8.5501
GBP/NOK 8.8573
GBP/THB 48.97
GBP/ZAR 12.9580

*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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