Daily Foreign Exchange Market Update

Yesterday we saw very little change between the Pound and the Euro in the foreign exchange market with the Pound slightly losing strength against its single currency counterpart. The GBPEUR opened at 1.2310, sharply dropping to a day low an hour after the open of trade, to 1.2299 before gaining strength over the next hour to peak at 1.2332. It then lost some ground across the rest of the day before closing only slightly lower at 1.23095. The Pound however gained strength against the US Dollar yesterday with the GBPUSD opening at 1.6134 slipping early morning to a day low of 1.6115. During lunch it peaked to 1.6178 before ending the day lower at 1.6178. The main piece of data coming out of the UK yesterday was unemployment rate which fell to 7.9% from 8.1%, the lowest rate since June 2011, some positive news for the economy. The only significant piece of data coming from the UK today is retail sales which came out at 2.9%, the same as the September 2011 result, it was only predicted to increase by 2.4% showing a greater consumer demand, in turn, a greater consumer confidence and economic growth. The month on month result increased by 0.6%, a lot better then last month's result of -0.2%.

The Euro gained a minimal amount of strength against the Pound and gained against the US Dollar during yesterday’s market session off the back of no data coming out of the Euro-zone yesterday. The EURUSD opened at 1.3107 before dropping to a day low minutes after the open of trade, to 1.3091. It gained over the morning and peaked early afternoon to 1.3137 before closing slightly lower at 1.3132. The main information from the Euro-zone today is that Angela Merkel is speaking at the EU summit later. She has already addressed the German government in the Bundestag where she reiterated her wish for Greece to stay in the Euro-zone. The EU summit today is meant to address youth unemployment which is one of the major concerns in the Euro-zone at the moment as well as discussing banking supervision and oversight. Later today Spain are set to sell 3, 4 and 10 year bonds hoping to raise between 3.5 and 4.5 billion Euros, however in the pre-market all the bonds are trading slightly lower then they were in previous auctions.

The US Dollar lost strength yesterday against both the Pound and the Euro during yesterday’s market session. The main data was from the housing sector where building permits and housing starts were released. Both increased more than expected with building permits coming out at 894K compared to the prediction of 810K and housing starts were a lot higher then analysts’ view of 770K, coming out at 872K. Today initial jobless claims will be released from the US with an increase expected, 363K compared to the previous result of 339K.

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