Foreign Exchange Market Update 25/04/2012

The Pound declined for the first time against the US Dollar and against the Euro yesterday in the foreign exchange market. The GBP/EUR exchange rate picked up from 1.2254 at the morning’s open to trade towards a new high of 1.2277, before trading back lower around 1.2215 by the close of the UK business day. The GBP/USD exchange rate picked up from 1.6141 and was fairly range bound between 1.6164 and 1.6125, before trading back around 1.6132 by the European market close. The Pound however declined slightly against the Australian Dollar, but managed to gain against the New Zealand Dollar in the foreign exchange market yesterday. The GBP/NZD exchange rate picked up from 1.9830 at the morning’s open to trade up towards 1.9868 by the close of the UK business day. The GBP/AUD exchange rate opened up from 1.5685 and finished the session lower at 1.5665.

Yesterday we had the release of the Public Finances (Mar) and Public Sector Net Borrowing (Mar) come in higher than expected. With the Public Finances (Mar) coming in at £16.5bln vs. £13.0bln which was up from the prior month’s revised figure of -£8.2bln and Public Sector Net Borrowing (Mar) came in higher than expected at £15.9bln vs. £14.2bln and up from the prior month of £9.9bln.

This morning we have some important data from the UK with the Gross Domestic Product due at 09:30 GMT, economists are expecting an increase for the quarter-on-quarter figure from -0.3% to 0.1% and a decline for the year-on-year figure from 0.5% to 0.3%. Also from the UK we have the CBI Business Optimism, Trends Selling Prices and Trends Total Orders for the month of April due at 11:00 GMT.

The Euro gained against the US dollar and against the Pound in the currency exchange market yesterday. The EUR/USD exchange opened up at 1.3170 and traded towards the high of 1.3218, before trading back 1.3206 by the European market close.

Yesterday economic data from the Euro-zone was fairly light with the French Consumer Confidence Indicator (Apr) coming in at 88 up from the prior moth of 87 and Italian Wages month-on-month was left unchanged at 0.0%, however the year-on-year figure declined from 1.4% to 1.2%.

We have no economic data scheduled from the Euro-zone today.

The US Dollar gained against the Pound, but declined against the Euro currencies during the European session. Yesterday’s economic data from the US was fairly negative with New Home Sales (Mar) month-on-month missing expectations at -7.1% vs. 1.9% and down from the prior months revised figure of 7.3%. Also Consumer Confidence (Apr) came in slightly lower than expected at 69.2 vs. 69.6 and down from the prior month of 69.5.

Today’s key economic data from the US will be the Durable Goods Orders (Mar) which is due at 13:30 GMT and the FOMC Rate Decision (Apr 20) due at 17:30 GMT. Economists are expecting a decline in Durable Goods Orders from 2.2% to -1.5% and US rates to be left unchanged at 0.25%. We will also be keeping an eye on the 12:00 GMT MBA mortgage Applications (Apr 20) and the FED Bernanke Press Conference which is held after European trading hours at 19:15 GMT.

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