Friday 4 May 2012

Foreign Exchange Market Update 04/05/2012


The Pound gained slightly against the US Dollar and against the Euro yesterday in the foreign exchange market. The GBP/EUR exchange rate picked up from 1.2297 at the morning’s open to trade in a fairly open range between 1.2276 and 1.2340, before trading back around 1.2308 by the close of the UK business day. The GBP/USD exchange rate picked up from 1.6179 to trade in a range between the low of 1.6158 and the high of 1.6215, before trading back around 1.6183 by the European market close. The Pound continued to gain against the Australian Dollar and the New Zealand Dollar in the foreign exchange market yesterday. The GBP/NZD exchange rate picked up from 2.20082 at the morning’s open to trade up towards 2.0218 by the close of the UK business day. The GBP/AUD exchange rate opened up from 1.5712 and finished the session higher at 1.5768.

Yesterday we had some negative economic data from the UK, with Nationwide House Prices missed expectations where economists were expecting an increase from -1.0% to 0.5% from the prior month, the data came in negative at -0.2%. Also missing expectations was PMI Services (Apr) which declined from the prior month of 55.3 to 53.3.

This morning Halifax Plc House Prices (Apr) posted a decline coming in at -2.4% vs. -0.8% expected by economists and down from the prior month of 2.2%. There is no further economic data scheduled from the UK today.

The Euro declined against both the US dollar and the Pound in the currency exchange market yesterday. The EUR/USD exchange opened up at 1.3158 and traded towards the low of 1.3096, before trading back 1.3146 by the European market close.

Yesterday economic data from the Euro-zone was slightly negative with Euro-zone Producer Price Index coming in at 3.3% vs. 3.4% down from the prior month of 3.6% for the year-on-year figure and 0.5% vs. 0.6% for the month-on-month. Also European Central Bank kept interest rates at 1.00%, but indicated that interest rates remain supportive and expect a gradual economic recovery this year.

This morning we have seen the release of Italian, French, German and Euro-zone Services PMI for the month of April, which have all missed expectations. German services PMI was down from 52.6 to 52.2 and Euro-zone services PMI for the month of April also declined from 47.9 to 46.9.

Later this morning we will look out for the Euro-zone Retail Sales due at 10:00 GMT, where economists are expecting an increase from-2.1% to -1.1%.

The US Dollar declined against the Pound But managed to gain against the Euro currencies during the European session yesterday. Economic Data was mixed from the US with the Initial and Continuing Jobless Claims coming in better than expected. Initial Jobless Claims came in at 365k vs. 379k down from 392k and Continuing Claims came in at 3276k vs. 3311k also down from the prior month of 3329k. However ISM Non-Manufacturing Composite (Apr) missed expectations coming in at 53.5 vs. 55.3 and declined from the prior month of the 56.

Today we have some important economic data from the US, with the Change In Non-farm Payrolls (Apr) and US Unemployment Rate (Apr) due at 13:30 GMT. Economists are expecting an increase in Non-Farm Payrolls from 120k to 165k and expect no change in the Unemployment Rate at 8.2%.

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

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