Foreign Exchange Daily Market Update 20/03/2012

The Pound continued to gain against the US Dollar yesterday, but declined against the Euro in the foreign exchange market. The GBP/EUR exchange rate picked up from 1.2044 at the morning’s open to trade in a open range between the day low of 1.1981, and high of 1.2071 before trading back to 1.2001 by the close of the UK business day. The GBP/USD exchange rate picked up from 1.5833 to trade up to the day’s high of 1.5904 before trading back towards 1.5897 by the European market close. The Pound also gained slightly against the Australian Dollar and declined against the New Zealand Dollar in the foreign exchange market. The GBP/NZD exchange rate picked up from 1.9224 at the morning’s open to trade down towards 1.9212 by the close of the UK business day. The GBP/AUD exchange rate opened up from 1.4960 and finished the session slightly higher at 1.4978.

There was no scheduled data release from the UK yesterday. However today we have the Consumer Price Index (Feb) year-on-year figure due at 09:30 GMT, where economists are expecting a decline from 3.6% to 3.3%. Also today we will see the release of the Retail Price Index, which is expected to decline from 3.9% to 3.5% for the year-on-year figure.

The Euro gained against the Pound and against the US Dollar in the currency exchange market yesterday. The EUR/USD exchange opened up at 1.3145 to trade up the high of the day at 1.3265, before trading back towards the 1.3245 level by the European market close.

Italian Industrial Orders (Jan) declined yesterday with the month-on-month figure declining from 5.2% to -7.4%, along with Industrial Sales (Jan) month-on-month also declining from 3.2% to -4.9%.

This Morning we had the release of German Producer Price index, which came in line with expectations at 3.2% and lower from 3.4% for the year-on-year figure and the month-on-month figure slightly missed expectations coming in at 0.4% vs. 0.5%. We have no further scheduled from the Euro-Zone today.

The US Dollar declined against the Pound and against the Euro currencies yesterday. We had a no significant data from the US yesterday; however we had NAHB Housing Market Index come in line with the previous month at 28, which were lower then the expected figure of 30.

We have some significant data out from the US today, firstly with the release of Building Permits (Feb) due at 12:30 GMT along with Housing starts. The Building permit is expected to increase slightly from 682k to 686k, as for the Housing Starts we are looking at an increase from 699k to 700k. Also later today US Fed Bernanke gives a lecture at George Washington University at 16:45 GMT.

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