Foreign Exchange Daily Market Update 04/04/12

The Pound declined against the US Dollar and against the Euro in the foreign exchange market. The GBP/EUR exchange rate picked up from 1.2009 at the morning’s open to trade down towards the low of the day of1.1961, before trading back around 1.1968 by the close of the UK business day. The GBP/USD exchange rate picked up from 1.6019 to trade down to the day’s low of 1.5955 before trading back towards 1.5964 by the European market close. The Pound also declined against the New Zealand Dollar and the Australian Dollar in the foreign exchange market yesterday. The GBP/NZD exchange rate picked up from 1.9451 at the morning’s open to trade down towards 1.9381 by the close of the UK business day. The GBP/AUD exchange rate opened up from 1.5511 and finished the session lower at 1.5389.

Yesterday on the economic data front we had seen some positive data from the UK, with Purchasing Manager Index Construction (Mar) coming in better than expected at 56.7 vs. 53.4.

This morning we have seen an improvement in the housing sector with the Halifax House Prices c.a. (Mar) beating expectations at 2.2% vs. -0.2%, which is up from the prior month of -0.4%. Also we have seen an improvement in the UK Purchasing Manager Index Services (Mar) coming in at 55.3 vs. 53.4 and up from the prior month of 53.8.

The Euro declined slightly against the US dollar and gained against the Pound in the currency exchange market yesterday. The EUR/USD exchange opened up at 1.3338 and traded in an open range between 1.3367 and 1.3299, before trading back towards 1.3336 by the European market close.

Yesterday we had the Euro-zone Producer Price Index year-on-year (Feb) come in better than expected at 3.6% vs. 3.5%, however the figure was still down from 3.8%.

This morning we have seen Italian PMI Services miss expectations coming in at 44.3 vs. 44.4; however German, French and Euro-zone PMI Services came in better than expected. German PMI Services 52.1 vs. 50, French PMI Services 50.1 vs. 50 and Euro-zone PMI Services 49.2 vs. 48.7. Later this morning we will be looking out for the Euro-zone Retail Sales (Feb) y/y due at 10:00 GMT, where economists are expecting a decline from 0.0% to -1.1%. Shortly after we will keep a close eye on European Central Bank Rate Decision due at 12:45 GMT, economists are expecting the rates to be unchanged at 1.00%.

The US Dollar gained against the Pound and gained against the Euro currencies yesterday. On the economic data front from the US, we had seen Factory Orders miss expectations at 1.3% vs. 1.5%, but was still up from the prior month of -1.1%.

Later today we will be looking out for the 13:15 GMT US ADP Employment Change (Mar) where economists are expecting a decline from 216k to 200k. Also to follow at 15:00 GMT is the release of the ISM Non-Manufacturing Composite (Mar), where economists are expecting a decline from 57.3 to 56.9.

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