Foreign Exchange Daily Market Update 05/03/12

The Pound closed out last week having made a slight loss against the US Dollar and gained against the Euro in the foreign exchange market. The GBP/EUR exchange rate moved up from Monday’s open at 1.1894, to close the week up at 1.2004. The GBP/USD exchange rate declined slightly across the course of the week, starting from Monday’s open at 1.5858 the pair traded to a week high of 1.5993 before finishing the week back around the 1.5850 level. The Pound also declined against the Australian dollar and gained slightly against the New Zealand Dollar in the foreign exchange market last week. The GBP/NZD exchange rate picked up from 1.9036, to trade higher around 1.9060 by the close of the week. The GBP/AUD exchange rate opened up from 1.4879 and finished the week lower at 1.4745.

The week ahead will see some key economic data released from the UK. The first significant data to look out for will be released today with the Purchasing Manager Index Services due at 09:30 GMT, followed by BOE Rate Decision and Asset Purchase Target due at 12:00 GMT on Thursday. Finally to the end of the week we will keep an eye out for the Industrial Production, Manufacturing Production and Producer Price Index all due at 09:30 GMT on Friday.

The Euro declined across the board throughout last week in the currency exchange market. The EUR/USD rate picked up from 1.3427 at Monday’s open, to trade down to a week low of 1.3187 before coming back to 1.3201 by the close of the European trading session on Friday.

The main market focus for the week ahead in Europe will be at 10:00 GMT today with the release of Euro-Zone Retail Sales, followed by the Euro-Zone Gross Domestic Product due at 10:00 GMT on Tuesday. During the week on Wednesday we will look out for the German Factory Orders due at 11:00 GMT and ECB Rate Decision on Thursday at 12:45 GMT. To end the week we will look out for German Consumer Price Index data due at 07:00 GMT on Friday.

This morning we have seen French Purchasing Manager Index come in slightly lower than expected at 50.0 vs. 50.3, whereas the German Purchasing Manager Index beat expectations slightly at 52.8 vs. 52.6. Later at 10:00 GMT we will keep an eye out for the Euro-Zone Retail Sales year-on-year, expected to decline -1.3% to -1.5%.

The US Dollar gained against the Euro, but managed to gain slightly against pound last week in the currency markets. This week’s key events to look out for will be today’s Factory Orders for the month of January and ISM Non-Manufacturing due at 15:00 GMT. Further in the week on Wednesday we will keep a close eye on ADP Employment change, which is expected to increase from 170k to 210k. To finish the week we will look out for the Change in Non-Farm Payrolls and the Unemployment Rate for the month of February due at 13:00 GMT.

Later today at 15:00 GMT, we will look out for the US Factory Orders for the month of January expected to decline from 1.1% to -1.6% and ISM Non-Manufacturing expected to decline slightly from 56.8 to 56.2.

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