Foreign Exchange Daily Market Update 05/04/12

The Pound continued its decline against the US Dollar yesterday, but managed to gain against the Euro in the foreign exchange market. The GBP/EUR exchange rate picked up from 1.2041 at the morning’s open to trade up towards the high of the day at 1.2103, before trading back around 1.2093 by the close of the UK business day. The GBP/USD exchange rate picked up from 1.5883 to trade down to the day’s low of 1.5830 before trading back towards 1.5878 by the European market close. The Pound also declined slightly against the Australian Dollar and gained against the New Zealand Dollar in the foreign exchange market yesterday. The GBP/NZD exchange rate picked up from 1.9469 at the morning’s open to trade up towards 1.9503 by the close of the UK business day. The GBP/AUD exchange rate opened up from 1.5486 and finished the session lower at 1.5482.

Yesterday on the economic data front we had seen some positive data from the UK, with Purchasing Manager Index Services (Mar) coming in better than expected at 55.3 vs. 53.4. Housing sector also showed an improvement in the UK with the Halifax House Prices c.a. (Mar) beating expectations at 2.2% vs. -0.2%, which is up from the prior month of -0.4%.

This morning UK Manufacturing Production posted its biggest drop since April 2011 with the month-on-month coming in at -0.1% vs. Exp.0.1% and for the year on year-on-year figure came in at -1.4% vs. 0.1%. Industrial Production (Feb) came in lower than expected at -2.3% vs. -2.1% for the year-on-year figure, however the previous month figures were revised from -3.8% to 4.0%.

Later this morning we have the Bank of England Asset Purchase Target for the month of April due at 12:00 GMT, alongside the Bank of England Rate Decision (Apr 5) where economists are expecting no change.

The Euro continued to decline against the US dollar and declined against the Pound in the currency exchange market yesterday. The EUR/USD exchange opened up at 1.3190 and traded in an open range between 1.3199 and 1.3106, before trading back towards 1.3127 by the European market close.

Yesterday we had seen Italian PMI Services miss expectations coming in at 44.3 vs. 44.4; however German, French and Euro-zone PMI Services came in better than expected. German PMI Services 52.1 vs. 50, French PMI Services 50.1 vs. 50 and Euro-zone PMI Services 49.2 vs. 48.7. We were then followed by disappointing Euro-zone Retail Sales data, with the figure declining from -1.1% to -2.1% for the year-on-year release and 1.1% to -0.1% for the month-on-month.

Later this morning we will be looking out for the German Industrial Production (Feb) due at 11:00 GMT, where economists are expecting a decline from 1.8% to 0.3% for the year-on-year figure.

The US Dollar gained against the Pound and gained against the Euro currencies yesterday. On the economic data front from the US, we had seen ADP Employment Change come in better than expected at 209k vs. 206k and was down from 230k from the prior month. Also ISM Non-Manufacturing missed expectations coming in at 56.0 vs. 56.8.

Today we will look out for the Initial and Continuing Jobless Claims due at 13:30 GMT.

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