Foreign Exchange Daily Market Update 06/03/12

The Pound gained against the US Dollar and against the Euro in the foreign exchange market yesterday. The GBP/EUR exchange rate picked up from 1.1980 at the morning’s open to trade in a range of 1.1974 and 1.2009, before trading back to 1.1995 by the close of the UK business day. The GBP/USD exchange rate picked up from 1.5808 to trade up to the day’s high of 1.5876 before trading back to 1.5868 by the European market close. The Pound also finished higher against the New Zealand Dollar and the Australian Dollar in the foreign exchange market. The GBP/NZD exchange rate picked up from 1.9181 at the morning’s open to trade up towards 1.9306 by the close of the UK business day. The GBP/AUD exchange rate opened up from 1.4805 and finished the session higher at 1.4870.

Yesterday from the UK we had the Purchasing Manager Index Services for the month of February, which come in lower than expected at 53.8 compared to 54.9 expected by economists and 56 from the prior month. We have no further data from the UK today.

The Euro declined against the Pound, but gained against the US Dollar in the currency exchange market yesterday. The EUR/USD exchange opened up at 1.3190 to trade up to the day low of 1.3160 before closing out at 1.3226 by the European market close.

Yesterday from the Euro-zone we had seen French Purchasing Manager Index come in slightly lower than expected at 50.0 vs. 50.3, whereas the German Purchasing Manager Index beat expectations slightly at 52.8 vs. 52.6. Later in the morning we saw Euro-Zone Retail Sales year-on-year come in better than expected at 0.0% vs. -1.5% expected by economists.

This morning we will look out the 10:00 GMT Euro-zone Gross Domestic Product, which is expected to be unchanged at 0.7% for the year-on-year figure and -0.3% for the quarter.

The US Dollar declined against the Pound and against the Euro currencies yesterday. We had some mixed economic data from the US yesterday; with Factory Orders (Jan) coming in at -1.0% better than the -1.5% expected by economists, but overall Factory Orders were down from 1.4% in the prior month. However ISM Non-Manufacturing Composite for the month of February came in much better than expected at 57.3 vs 56.0, the highest since February 2011.

Today we have no scheduled data release from the US.

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