Daily Foreign Exchange Market Update

Last week we saw the Pound lose ground against the Euro with the GBPEUR rate opening at 1.2459 and closing out at a weekly low of 1.2371; it did hit a weekly high of 1.2467 at the open of trade on Wednesday. The Pound did however see gains against the US Dollar during last week’s market session with the GBPUSD rate opening at a weekly low of 1.5902 and closing at a weekly high of 1.6031. Last week we saw UK public sector net borrowing be released with the figure coming out lower than expected at £6.5B showing a surplus which is good news for the economy. The MPC minutes from their last meeting were released too with the data showing all members voting to keep the base rate at 0.5%. This week will see the revised GDP figure be release which is set to remain at 1.0% and Thursday will see Mervyn King hold a press conference about the financial stability report.

The Euro gained against the Pound and the US Dollar in the foreign exchange market last week with the EURUSD rate opening at a weekly low of 1.2763 and closing at a weekly high of 1.2958. The main news from the Euro-zone last week was that of Moody’s cutting France’s credit rating from AAA to AA1 and the other credit rating agency, Fitch, giving it a negative outlook for the next year. French, German and Euro-zone PMI results all came out better than expected and the German 3Q GDP figure came out at 0.2%, as expected. Monday will see the Euro-group meeting be held in Brussels to discuss a range of financial issues such as the Euro support mechanism. On Thursday Italy will hold a bond auction on their 10-year bonds.

The US Dollar lost ground against both the Pound and the Euro in the foreign exchange market last week. It was a relatively quiet week for data release due to Thanksgiving but unemployment claims came out better than expected, 410K compared to the 415K predicted. This week the main data release will be durable goods orders which are set to fall by 0.6%. This shows a lower amount of consumer confidence as durable goods are those that last for at least three years so the initial investment must be worth it. Thursday will see the preliminary quarter-on-quarter GDP figure be released which is set to rise from 2.0% to 2.8%.

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