Daily Foreign Exchange Market Update

Yesterday the Pound fall slightly against the Euro in the foreign exchange market with the GBPEUR rate opening at 1.2282, climbing throughout the first half of the day, peaking to a daily high of 1.2307 just after lunch. However over the rest of the day it lost strength to close at a daily low of 1.2280, only marginally down from the opening rate. The Pound also weakened against the US Dollar during yesterday’s market session. The GBPUSD rate opened at 1.6012 and rose to a daily high mid-morning to reach 1.6021 but then lost strength over the rest of the day to close out at a daily low of 1.5932. Only one piece of tangible data was released yesterday, the British Bankers’ Association (BBA) loans for house purchases, the number of new mortgages approved for house purchases by BBA-approved banks which accounts for approximately 65% of all mortgages. The Governor of the Bank of England, Mervyn King, spoke yesterday at the Chamber of Commerce where his main concern was that banks do not have enough capital to absorb losses on bad loans which in turn makes it harder for them to borrow and provide credit needed by households and businesses. Today there will be no data being released from the UK.

The Euro gained strength against the Pound but lost some against the US Dollar during yesterday’s market session. The EURUSD rate opened at 1.3037, peaking early morning to a daily high of 1.3041 but then slipped down below the 1.30 mark to close out at a daily low of 1.2972. Yesterday the eurozone consumer confidence results were released, a survey on 2300 consumers in the eurozone, the figure coming out at -25.6, slightly higher then the previous result of -25.9 showing pessimism within the eurozone. This morning has seen German PMI (Purchasing Manager Index) figures being released, coming out lower than expected, 45.7 compared to the predicted rate of 48. This has seen the Euro lose strength against the Pound showing it may be a good time to be buying Euros. Later today the President of the ECB, Mario Draghi will speak at a closed-door meeting at the Bundestag, Berlin. The meeting is set to cover the budget, EU affairs and finance within the eurozone.

The US Dollar gained against both the Pound and the Euro in the foreign exchange market yesterday even though no data came out of the US. Today will see the Federal Open Market Committee (FOMC) meet and decide on whether to keep the key interest rate the same or change it. It is currently 0.25% and nearly all analysts believe it will be kept at this rate; however the FOMC statement on this contains their outlook on the economy in general and hints about future monetary policies which is why analysts keep a close eye on the releases.

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