Foreign Exchange Daily Market Update 19/03/12

The Pound closed out last week having made gains against the US Dollar and against the Euro in the foreign exchange market. The GBP/EUR exchange rate moved up from Monday’s open at 1.1954, to close the week at 1.2011. The GBP/USD exchange rate gained across the course of the week, starting from Monday’s open at 1.5677 the pair traded to a week low of 1.5601 before finishing the week around the 1.5830 level. The Pound also gained against the Australian dollar and against the New Zealand Dollar in the foreign exchange market last week. The GBP/NZD exchange rate picked up from 1.9172, to trade higher at 1.9183 by the close of the week. The GBP/AUD exchange rate opened up from 1.4893 and finished the week higher at 1.4947.

The week ahead will see some key economic data released from the UK. The first significant data to look out for will be released Tuesday with the Consumer Price Index year-on-year (Feb) due at 09:30 GMT, where economists are expecting a decline from 3.6% to 3.3%. During the week on Wednesday we have The Bank of England Minutes due at 09:30 GMT followed by the UK Budget being presented to the Parliament at 12:30 GMT. Finally we will look out for the Retail Sales data on Thursday due at 09:30 GMT, where economists are expecting an increase from 1.9% to 2.3% for the February year-on-year figure. There is no data from the UK today.

The Euro gained against the US Dollar, but declined against the Pound throughout last week in the currency exchange market. The EUR/USD rate picked up from 1.3116 at Monday’s open, to trade down to a week low of 1.3005 before coming back to 1.3171 by the close of the European trading session on Friday.

The main market focus for the week ahead in Europe will begin on Tuesday, with the release of German Producer Prices (Feb) year-on-year due at 07:00 GMT. Economists are expecting a decline from 3.4% to 3.2% for the year-on-year figure and a decline from 0.6% to 0.5% for the month-on-month figure. Later in the week on Thursday we will have a fair amount of data releasing. Firstly with the release of German Purchasing Manager index due at 08:30 GMT, then at 09:00 GMT we will see the release of the Euro-zone Purchasing Manager Index, followed by Euro-zone Industrial New Orders at 10:00 GMT and Euro-zone Consumer Confidence (Mar) due at 15:00 GMT.

This morning we have seen Euro-zone Current Account n.s.a. come in at €-12.3Bln for the month of January compared to the previous figure of €18.3bln and have seen a drop in Italian Industrial Orders month-on-month (Jan) from 5.2% to -7.4%.

Later this morning we will see the release of the Euro-zone Construction Output due at 10:00 GMT.

The US Dollar declined across the board especially against the Euro and the Pound last week in the currency markets. This week’s key events to look out for will be Tuesday’s US Building Permits due at 12:30 GMT where economists are expecting a gain from 682k to 686k. On Wednesday we have the Mortgage applications due at 11:00 GMT and Existing Home Sales due at 14:00 GMT. Later in the week on Thursday we will look out for Initial and Continuing Jobless Claims due at 12:30 GMT, followed by US Leading Indicators (Feb) and House Price Index both due at 14:00 GMT. Finally Friday will see the release of New Home Sales due at 14:00 GMT and Fed’s Lockhart is due to speak in Washington after hours at 18:30 GMT.

Today we have the release of NAHB Housing Market (Mar) due at 14:00 GMT where economists are expecting an increase from 29 to 30.

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