Daily Foreign Exchange Market Update

Last week in the foreign exchange market we saw the Pound finally gain some strength against the Euro and the US Dollar. The GBPEUR rate opened the week at 1.1483 and dropped to a weekly low of 1.1371 mid-week before it strengthened over the back end of the week, hitting 1.1624 before closing out the week at 1.1583. The GBPUSD rate opened the week at 1.4936 and like the previous rate it hit a weekly low of 1.4831 mid-week before closing out the week at 1.5131. It was a quiet week for data release from the UK with the main piece of data being industrial and manufacturing production which both fell by 2.9% and 3.0% respectively.

The US Dollar also weakened against the Euro last week with the EURUSD rate opening at 1.3008 and closing out at 1.3059. The main news from the Eurozone last week was their CPI (inflation) result which increased by 1.8% as expected. US retail sales came out of the US last week better than expected at 1.1%. The US CPI data also was released with the figure coming out slightly higher than expected at 2.0%.

Over the weekend we had some significant news come out of Cyprus where, due to an EU bailout deal, bank customers have to pay a levy of up to 9.9% on their savings. Savers with up to €100K in their bank will be charged a one-off amount of 9.9% of the amount in their account and those with under €100K will see a 6.7% charge implemented; this deal is expected to raise nearly €6Bn for Cyprus.

This week is an important week for the UK as the Chancellor, George Osborne will present the 2013 Budget to Parliament on Wednesday. We will also see UK jobless claims change and the unemployment rate be released with the rate for the 3 months up to January expected to remain at 7.8%.

On Wednesday the FED’s FOMC will also meet and decide whether or not they want to change their base interest rate with no change expected; staying at 0.25%.

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

Daily Foreign Exchange Market Update

Last week in the foreign exchange market we saw the Pound lose strength against the Euro and the US Dollar. The GBPEUR rate opened the week at 1.2305 and lost ground across the first half of the week, hitting a weekly low of 1.2273 on Wednesday morning. It then gain strength over the latter half of the week, hitting a weekly high of 1.2429 on Friday morning before closing the week out at 1.2386. The GBPUSD rate opened the week at 1.6037 and peaked on Tuesday afternoon to a weekly high of 1.6131 before it dropped off and hit a weekly low of 1.6002 on Friday afternoon, closing the week out at 1.6030. The main news from the UK last week was that of the Bank of England’s MPC deciding to keep the base interest rate at 0.5% and the asset purchase programme at £375B. This week there will not be much data coming from the UK with the most significant being that of the jobless claims change, showing the amount of new people who are claiming unemployment benefits but still actively seeking work. The figure is set to fall from 10.1K to 5K, some good news for the UK labour market.

The Euro gained strength against the Pound but weakened against the US Dollar during last weeks market session. The EURUSD rate opened at 1.3032 and moved to a weekly high of 1.3126 Wednesday afternoon before it slipped to a weekly low of 1.2877 Friday afternoon, closing the week out at 1.2941. We saw Euro-zone retail sales come out much lower than expected, at -3.6% compared to the predicted figure of -0.8%, showing a lower amount of confidence from consumers in the economy. Euro-zone third quarter GDP came out in line with predictions at -0.1% and on Thursday the ECB decided to keep their base interest rate at 0.75%. This week we are set to see the German CPI (inflation) be released which is predicted to remain at 1.9% and later this week the Euro-zone CPI figure will also be released and set to stay at 1.5%. On Thursday the ECB will release their monthly report discussing various economic topics including information on the latest ECB meeting.

Last week we saw the US Dollar gain ground against both the Pound and the Euro in the foreign exchange market. The latter half of last week saw non-farm payrolls and the unemployment rate released, both showing good news for the labour market in the US. Non-farm payrolls increased by 145K compared to the predicted 85K increase and the unemployment rate fell from 7.9% to 7.7%. This week the Federal Open Market Committee (FOMC) decides on whether or not to keep the base rate at 0.25% with analysts predicting no change. On Friday US CPI (inflation) will be released with the figure set to fall from 2.2% to 1.9%.

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

Daily Foreign Exchnage Market Update

The Pound saw itself gain strength against both the Euro and the US Dollar in the foreign exchange market yesterday. The GBPEUR rate opened at a daily low of 1.2303, moving up to a daily high at midday to 1.2380 but then lost the momentum during the afternoon to close out at 1.2370. The GBPUSD rate opened down at 1.5950 and dropped over the first hour of the day to reach a daily low of 1.5950. During the rest of the day it gained some strength, peaking at 1.6048 mid-afternoon and closing slightly lower at 1.6014. There was no data released from the UK yesterday.

This morning saw UK third quarter GDP data being released with figure being much better than expected. The economy contracted during April and June of this year by 0.4% and analysts predicted that the economy would grow by 0.6% between July and September but the figure came out at 1%. Yearly GDP data was also released and the economy was expected to shrink by 0.5% but it stayed flat, not changing at all. The quarter on quarter result showed that Britain has finally left a recession with the best result for 5 years, pre-recession, with Olympic ticket sales and a higher demand for services the supposed reason. As soon as the figure was released this morning the Pound peaked sharply against the majority of currencies, especially against the Euro which shows today would be a good day to buy Euros.

The Euro lost strength against the Pound and the US Dollar during yesterday’s market session. The EURUSD rate opened at 1.2990 and plummeted to a daily low of 1.2921 just an hour after opening. It then picked up during the rest of the day, peaking early afternoon at 1.2983 and closing at 1.2945. Euro-zone PMI (Purchasing Managers Index) was released yesterday, a figure that rates the level of business conditions including employment, production, new orders and supplier deliveries. The figure came out at 45.8, lower then the previous result of 46.1, where a figure below 50 shows a contraction in business conditions. As well as this, Mario Draghi spoke at a closed-door meeting at the Bundestag, Berlin where he started by defending the ECB’s bond buying plan to ease Euro-zone debt. He stated that he expects the economy to remain weak in the short term, reflecting adjustments that many countries are undergoing in order to lay foundations for sustainable future prosperity. Although he believes the economy will be weak the overall felling of the speech was one of optimism as he kept repeating that the economy is moving in the right direction. Today is a very quiet day for the Euro-zone with no significant data being released.

The US Dollar weakened against the Pound but strengthened against the Euro in the foreign exchange market. The EURUSD rate opened at 1.2990 and followed a similar pattern to the GBPUSD rate, falling sharply early morning to reach a daily low of 1.2921. It then strengthened and peaked early afternoon at 1.2983 before closing slightly lower at 1.2945. No data came out of the US yesterday but today will see jobless claims, the number of people claiming for unemployment whilst actively seeking work; a figure that is highly correlated with labour market conditions. The previous result was 388K and the expected figure is set to fall to 370K. Durable goods figures will also be released today, an important figure as durable goods are expected to last longer than three years therefore they have to be worth the investment. The previous result was -13.2% but this result is set to be a positive figure, 7.5%.

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

Daily Foreign Exchange Market Update

Yesterday the Pound fall slightly against the Euro in the foreign exchange market with the GBPEUR rate opening at 1.2282, climbing throughout the first half of the day, peaking to a daily high of 1.2307 just after lunch. However over the rest of the day it lost strength to close at a daily low of 1.2280, only marginally down from the opening rate. The Pound also weakened against the US Dollar during yesterday’s market session. The GBPUSD rate opened at 1.6012 and rose to a daily high mid-morning to reach 1.6021 but then lost strength over the rest of the day to close out at a daily low of 1.5932. Only one piece of tangible data was released yesterday, the British Bankers’ Association (BBA) loans for house purchases, the number of new mortgages approved for house purchases by BBA-approved banks which accounts for approximately 65% of all mortgages. The Governor of the Bank of England, Mervyn King, spoke yesterday at the Chamber of Commerce where his main concern was that banks do not have enough capital to absorb losses on bad loans which in turn makes it harder for them to borrow and provide credit needed by households and businesses. Today there will be no data being released from the UK.

The Euro gained strength against the Pound but lost some against the US Dollar during yesterday’s market session. The EURUSD rate opened at 1.3037, peaking early morning to a daily high of 1.3041 but then slipped down below the 1.30 mark to close out at a daily low of 1.2972. Yesterday the eurozone consumer confidence results were released, a survey on 2300 consumers in the eurozone, the figure coming out at -25.6, slightly higher then the previous result of -25.9 showing pessimism within the eurozone. This morning has seen German PMI (Purchasing Manager Index) figures being released, coming out lower than expected, 45.7 compared to the predicted rate of 48. This has seen the Euro lose strength against the Pound showing it may be a good time to be buying Euros. Later today the President of the ECB, Mario Draghi will speak at a closed-door meeting at the Bundestag, Berlin. The meeting is set to cover the budget, EU affairs and finance within the eurozone.

The US Dollar gained against both the Pound and the Euro in the foreign exchange market yesterday even though no data came out of the US. Today will see the Federal Open Market Committee (FOMC) meet and decide on whether to keep the key interest rate the same or change it. It is currently 0.25% and nearly all analysts believe it will be kept at this rate; however the FOMC statement on this contains their outlook on the economy in general and hints about future monetary policies which is why analysts keep a close eye on the releases.

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

Daily Foreign Exchange Market Update

Last week saw the Pound weaken against the Euro in the foreign exchange market. The GBPEUR opened at 1.2406 quickly rising to a weekly high at the end of trade on Monday, to 1.2409. Throughout the rest of the week the Pound depreciated against it's Euro counterpart, hitting a weekly low on Friday morning at 1.2278, before closing the week slightly higher at 1.2409. The Pound also lost strength against the US Dollar last week with the GBPUSD opening the week at 1.6030, gaining strength over the first half of the week, peaking on Wednesday lunch time at 1.6178 before slipping lower over the remaining part of the week to close at a weekly low of 1.6003 Friday afternoon. There were a range of different results coming out of the UK last week; firstly CPI (inflation) for September was released and came out at 2.2% compared to 2.5% last September, showing the lowest rate of inflation for two years. Jobless claims and unemployment rates were released with a positive result for both. Jobless claims fell by 4K and unemployment rate fell from 8.1% to 7.9%, the lowest it has been for over a year. Growth in the economy is boosted by consumer confidence and retail sales saw a healthy increase for September compared to August, the month on month figure grew by 0.6% compared to -0.2% for August. The majority of data coming out of the UK in the last few weeks has been positive and now economists are expecting third quarter GDP data to show growth, in turn ending the UK’s nine month long recession. Some economists also believe that as inflation is close to the target rate of 2% and most data has been positive showing the UK economy may be fairing better than expected, the Bank of England may increase the amount in their Asset Purchase Program in November. From last months minutes we gleaned that policymakers were split on whether there was any need for additional QE in the future as the bank has already exhausted the allotment for this month.

The Euro strengthened against the Pound but strengthened against the US Dollar during last week’s market session. The EURUSD opened at a weekly low of 1.2920, gaining strength over the first half of the week to peak on Wednesday at 1.3137; it then closed lower on Friday at 1.3022. Last week the main data from the eurozone was the EU Summit where leaders decided to set up a single eurozone banking supervision meaning they are getting closer to a banking union which allows the central bank to intervene, if necessary, on any of the 6,000 banks in the eurozone. On Thursday Italy’s third largest lender Monte Paschi had its credit rating cut to junk by Moody’s and said it may need more state aid as it was the only Italian lender to fail the European Banking Authority’s stress test. Thursday also saw Spain sell off 3/4/10 year bonds with all the yields improving, falling a little across the day. It was also announced last week that there may be a general strike across the entire Iberian Peninsula, the first time ever, on November 14. Portugal has already called a general strike and Spain may decide to join them, with protests being held over austerity measures. This week will be very quiet for data release with the only significant piece being eurozone government debt/GDP ration which was previously 87.2%.

The US Dollar gained strength against the Pound but lost ground against the Euro during last week’s foreign exchange market session. The main data last week was CPI (inflation) which was slightly higher than expected, 2.0% compared to the prediction of 1.9%. This inflation figure shows stable growth in the US economy, add this to the retail sales figure which came out at 1.1% up from 0.8%, shows an improvement in the US. This week will see the FOMC rate decision which is expected to be kept at 0.25%. As well as this durable goods orders will be released, expected to be up by 6.8% compared to -13.2% last month. Durable goods are meant to last more than three years so they require large investments and usually reflect optimism as the expenditure must be worth while. Finally, more good news for the US economy as Friday will see third quarter GDP be released, it is also set to increase by 1.8% compared to 1.3% last quarter.

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

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.

Foreign Exchange Daily Market Update 19/05/11

The Pound suffered yesterday as the economic docket reinforced a negative outlook for the nation. The GBP/USD exchange rate slipped from the day's high of 1.6288 to 1.6105 when it came to light that the number of Britons claiming jobless benefits rose in April by 12,400. This is the fastest pace of jobless growth the country has seen since January of 2010, and came in despite estimates calling for no change to occur in the claimant count rate. Further to this the Bank of England published it's minutes to May's policy meeting, revealing that most members of the MPC see raising interest rates as a risk to economy's recovery. The minutes showed that the vote was split 6-3 in favour of keeping interest rates on hold this month. As usual Andrew Sentance voted for a 50 basis-point increase, while Spencer Dale and Martin Weale continued to vote for a 25 basis-point rise. Many trader's had hoped that; given the central bank's forecasts on inflation reaching 5% this year and recent data pointing towards these forecasts being true, that more policy makers would have shifted to a more hawkish stance, which would have lead to an appreciation in the Pound as rate hike expectations increase.

April's retail sales figures headline the UK's docket. Expectations had called for sales inclusive of fuel receipts to grow by 0.8% up from March's 0.2% increase, while excluding fuel sales, retail figures advanced by the same margin. However when the figure beat these expectations to see sales excluding fuel reciepts rise by 1.2% month-on-month and inclusive of fuel sales there was 1.1% increase, and further to this March's figures were revised up to 0.4% and 0.3% respectively. The market has reacted well to the news with the Pound putting in gains against the Dollar and the Euro.

A mixed outlook from ECB board members made it difficult for traders to speculate on where the Euro currency exchange rate is heading. Greece came back into the lime light when ECB board member Vitor Constancio said that restructuring Greece's debt could be in store to avoid a default, but argued that it ought to be "the last resort" as it entails "enormous consequences." However Governing Council member Ewald Nowotny said restructuring of Greece's debt is "definitely not an element of discussion" at the ECB. He then spoke of interest rates saying that rates will rise to match growth and inflation, despite the fact that further hikes could raise the risk of debt contagion. But for the most part it seems sovereign debt fears weighed on the Euro through the first half of yesterday as the EUR/USD dropped to a low of 1.4197 from 1.4286.

The European docket is looking exceptionally light today with the only event of interest being ECB President Jean-Claude Trichet and ECB Executive Board Member Gertrude Tumpel-Gugerell's commentary on the state of the European economy. Typically Trichet's comments hold a lot of sway within the foreign exchange market so expect the Euro exchange rate to move in either direction depending on the outlook Trichet provides.

The highlight of yesterday's North American trading session was the release of the FOMC's latest minutes. For the most part the minutes echoed Chairman Ben Bernanke's comments at the post-decision press conference in April, where he cited concerns among Fed policy makers over the "upside risk to the inflation outlook," and the downside risk to growth. However a few policy makers at the meeting said the increase in inflation risks meant that the Fed should stand ready to tighten financial conditions sooner than had been expected.

The week's second round of US housing figures make an appearance on today's docket. Existing home sales are expected to have risen by 2.0% in April, a slow down from March's 3.7% rise in sales. The data has the potential to weaken the Dollar's standing against the other majors as the housing market looks to remain week. With New homes sales having grossly missed expectations earlier in the week it is possible that today's figures could do the same.