Daily Foreign Exchange Market Update

Thursday saw the Pound stay unchanged against the Euro, opening and closing at 1.2315, peaking early morning to 1.2330 and dipping to a day low of 1.2304 around noon. The Pound however lost strength against the US Dollar yesterday with the GBPEUR rate opening at 1.6142, falling to a day low early morning to 1.6116. It peaked at midday to 1.6171 and fell throughout the rest of the day to close out at 1.6138. Yesterday saw retail sales being released from the UK with positive results coming out. In September sales in creased by 0.6%, much better then August results which fell by 0.1%. Clothing and footwear sales were up by 2%, showing solid growth from the UK in Q3.

Today will see UK Public Finances, the amount of money financed to the government, being released. The previous figure was a deficit, –9.6B, which is unfavourable and can be bearish for the Pound. The figure for September is set to come out at 4.7B, a more positive result.

The Euro was unchanged against the Pound and lost ground against the US Dollar in the foreign exchange market yesterday. The EURUSD opened at 1.3107, climbing mid-morning to 1.3129 before falling for the rest of the day – reaching a day low of 1.3078, closing slightly higher at 1.3098. Yesterday the main news was from the EU Summit where the leaders have agreed to set up a single eurozone banking supervision, meaning they are getting closer to a banking union which allows the central bank to intervene, if necessary, on any of the 6,000 banks in the eurozone. There was some news out of Italy with its third largest lender having its credit rating cut to junk (Baa3 to Baa2) by Moody’s. Today will see German Producer Prices being released which are set to rise by 1.6%, same as last years result, showing an increase in the prices paid by domestic producers for goods.

The US Dollar gained strength against both the Pound and the Euro during yesterday’s market session even though US initial jobless claims came out a lot higher then expected, 388K compared to 365K. Today there will be no data coming out of the US.

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