The Pound finished marginally higher against the Euro, but fell just over a cent against the US Dollar in the foreign exchange market yesterday. The GBP/EUR exchange rate picked up from the morning’s open at 1.1490 to trade at 1.1495 by the close of the UK business day. The GBP/USD exchange rate however; fell across the course of the day; falling from 1.6011 at the morning’s open, to trade down at 1.5907 by the market close. There was no significant economic data released from the UK yesterday, with the depreciation against the US Dollar possibly being attributed to shifts in risk sentiment in regards the on-going woes in Europe.
Today will see the release of October’s CBI reported sales numbers; with the market forecast for a decline to around -16, lower than the previous month’s reading of -15, which could put a small amount of pressure on the Pound.
The Euro declined slightly against the Pound, but fell more heavily against the US Dollar in the currency exchange market yesterday. The EUR/USD exchange rate fell throughout the day, from the market open at 1.3933 to trade down at 1.3837 by the close of the European trading session. The European Central Bank (ECB) released its bank lending survey yesterday; showing that demand for year-long loans from the ECB was weaker than analyst’s initially forecast. The central bank announced it will lend banks 56.9 billion euros for 12 months; less than the median forecast of 70 billion euros in a Bloomberg News survey, and will also lend 44.6 billion euros for three months tomorrow, when 85 billion euros in three-month loans mature. The 3-month figure is also less than the 50 billion euros predicted in the Bloomberg survey.
One of the bigger events in focus for Europe yesterday was the EU leaders’ summit; which had slightly spooked markets with the cancellation of the finance ministers meeting – indicating that a detailed solution to the current debt woes was still far off. There was some resolution last night however, with the announcement that EU leaders have agreed to extend the EFSF fund to around €1 trillion, and will force banks across the region to increase their capital reserves. In regards to Greece specifically; the nation will have to reduce its public debt to 120% of GDP by 2020, with private investors agreeing to a voluntary bond swap that will wipe away 50% of the country’s obligations. Euro Zone member states will contribute up to €30 billion in additional capital while the “official sector” – presumably the EU – will provide additional financing up to €100 billion, for a total of €130 billion in new aid. This may bring some comfort to the market; but as many market experts have indicated, this is not a complete resolution, and may only serve to extend the problem.
In regards to economic data from Europe today; we will see the release of German CPI (inflation) figures for October, which are expected to show a slight slowdown in inflation which would be welcomed by the region. The Euro-zone business climate indicator figure for October will also cross the wires today, with the expectation for a fall in the level, which would not be positive for the single-currency.
The US Dollar did benefit from the European worries yesterday; gaining nearly a cent against both the Pound and the Euro. There was disappointing economic data released from the US though; with September’s durable goods orders showing a sharp drop from -0.1% to 0.8%.
Today will see the release of pending home sales numbers for September, which are expected to fall, but are unlikely to influence the market too much as the main focus will be on the reading of 3rd quarter (annualized) GDP this afternoon. The market forecast is for an increase in growth to around 2.5% which could see the Dollar gain some further strength in the market.
This Daily Market Update is brought to you by The Market Team @ KBRFX
– Exchange Rate, Currency Conversion & Foreign Currency Transfer specialists.
Today will see the release of October’s CBI reported sales numbers; with the market forecast for a decline to around -16, lower than the previous month’s reading of -15, which could put a small amount of pressure on the Pound.
The Euro declined slightly against the Pound, but fell more heavily against the US Dollar in the currency exchange market yesterday. The EUR/USD exchange rate fell throughout the day, from the market open at 1.3933 to trade down at 1.3837 by the close of the European trading session. The European Central Bank (ECB) released its bank lending survey yesterday; showing that demand for year-long loans from the ECB was weaker than analyst’s initially forecast. The central bank announced it will lend banks 56.9 billion euros for 12 months; less than the median forecast of 70 billion euros in a Bloomberg News survey, and will also lend 44.6 billion euros for three months tomorrow, when 85 billion euros in three-month loans mature. The 3-month figure is also less than the 50 billion euros predicted in the Bloomberg survey.
One of the bigger events in focus for Europe yesterday was the EU leaders’ summit; which had slightly spooked markets with the cancellation of the finance ministers meeting – indicating that a detailed solution to the current debt woes was still far off. There was some resolution last night however, with the announcement that EU leaders have agreed to extend the EFSF fund to around €1 trillion, and will force banks across the region to increase their capital reserves. In regards to Greece specifically; the nation will have to reduce its public debt to 120% of GDP by 2020, with private investors agreeing to a voluntary bond swap that will wipe away 50% of the country’s obligations. Euro Zone member states will contribute up to €30 billion in additional capital while the “official sector” – presumably the EU – will provide additional financing up to €100 billion, for a total of €130 billion in new aid. This may bring some comfort to the market; but as many market experts have indicated, this is not a complete resolution, and may only serve to extend the problem.
In regards to economic data from Europe today; we will see the release of German CPI (inflation) figures for October, which are expected to show a slight slowdown in inflation which would be welcomed by the region. The Euro-zone business climate indicator figure for October will also cross the wires today, with the expectation for a fall in the level, which would not be positive for the single-currency.
The US Dollar did benefit from the European worries yesterday; gaining nearly a cent against both the Pound and the Euro. There was disappointing economic data released from the US though; with September’s durable goods orders showing a sharp drop from -0.1% to 0.8%.
Today will see the release of pending home sales numbers for September, which are expected to fall, but are unlikely to influence the market too much as the main focus will be on the reading of 3rd quarter (annualized) GDP this afternoon. The market forecast is for an increase in growth to around 2.5% which could see the Dollar gain some further strength 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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