Foreign Exchange Daily Market Update 23/02/12

The Pound finished lower against the US Dollar and against the Euro in the foreign exchange market yesterday. The GBP/EUR exchange rate picked up from 1.1921 at the morning’s open to trade down to the day’s low of 1.1822, before trading back to 1.1828 by the close of the UK business day. The GBP/USD exchange rate picked up from 1.5774 to trade down to the days low of 1.5647 before trading back to 1.5676 by the European market close. The Pound also finished lower against the New Zealand Dollar and the Australian Dollar in the foreign exchange market. The GBP/NZD exchange rate picked up from 1.8926 at the morning’s open to trade down to 1.8895 by the close of the UK business day. The GBP/AUD exchange rate opened up from 1.4808 and finished the session lower at 1.4742.

Today from the UK we will look out for the 09:30 GMT BBA Loans for House Purchase (Jan) expected to increase from 36,171 to 36,250. Followed by CBI Trends Selling Prices and Total orders (Feb) which are due at 11:00 GMT.

The Euro gained against the pound and against the US Dollar in the currency exchange market yesterday. The EUR/USD exchange opened up at 1.3221 to trade up to the day high of 1.3267 before closing out at 1.3250 by the European market close. Yesterday we saw a fair bit of economic data from the Euro-zone; with French PMI Manufacturing coming in better than expected at 50.2 vs. 49.0 and the French CPI coming in line with expectations at 2.6% vs. Exp. 2.8%. German PMI Manufacturing and Services both came in slightly lower, with Manufacturing coming in at 50.1 vs. 51.5 and PMI Services coming in short at 52.6 vs. 53.9 expected by economists.

This morning we have seen the release of German IFO Business Climate, Current Assessment and Expectations for the month of February, which have all come in better than expected. German Business Climate came in at 109.6 vs. 108.8 expected, followed by Current Assessment beating expectations at 117.5 vs. 116.5 and German IFO Expectations came in at 102.3 vs. 102 expected by economists.

The US Dollar gained against the Pound, but declined slightly against the Euro currencies yesterday. Yesterday we saw mixed data from the US as Existing Home Sales month-on-month (Jan) came in short of expectations at $4.75m vs. $4.65m expected. However previous months figure was revised from $4.61m to $4.38m, showing that the data is more positive prior to the previous month.

Today we will look out for the US week-on-week Initial and Continuing jobless claims due at 13:30 GMT, followed by US House Price Index M/M (Dec) due at 15:00GMT.

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