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 Exchange Market Update

Yesterday the Pound saw gains against the Euro but losses against the US Dollar in the foreign exchange market. The GBPEUR rate opened at a daily low of 1.2280 but hit a daily high of 1.2328 at midday before closing the day out at 1.2312. The GBPUSD rate opened at 1.6107 and hit a daily high of 1.6114 at midday; it then slipped to a daily low an hour after at 1.6082 before closing the day out at 1.6101. Yesterday we saw UK PMI services come out lower than expected at 50.2 compared to the 51 predicted, showing a lower rate of expansion in the services sector. Today we will see the Bank of England Monetary Policy Committee (MPC) decide on the base interest rate and asset purchase programme amount with both expected to remain at 0.5% and £375B respectively.

The Euro saw losses against the Pound and the US Dollar during yesterday’s market session with the EURUSD rate opening at a daily high of 1.3117. It weakened across the morning before it hit a daily low of 1.3060 early afternoon before it closed out at 1.3076. Euro-zone retail sales were released yesterday with the figure for October coming out much lower than expected at -3.6% compared to the predicted figure of -0.8%. The month on month figure also came out lower than expected, at -1.2%, the lowest rate we have seen since June 2010. Today, the main news from the Euro-zone will be the ECB’s decision on whether or not to change the base interest rate from the current level of 0.75% with analysts predicting no change will come.

The US Dollar saw gains against the Pound and the Euro in the foreign exchange market yesterday even though non-farming employment change came out lower than expected at 118K compared to the predicted 129K, the lowest since last October. Today unemployment claims will be released, the number of individuals claiming for unemployment insurance for the first time in the past week, with the figure set to fall from 393K to 382K.

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.

Foreign Exchange Daily Market Update 08/09/11

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The Pound continued with another day of losses against the Euro and the US Dollar in the foreign exchange market yesterday. The GBP/EUR exchange rate fell from the mornings open at 1.1372 to 1.1343 by the end of the day, the Pound not helped by overall disappointing economic figures which showed that industrial production and manufacturing in the UK continued to fall annually; at an advanced pace. There was small glimmer of positive news with July’s figures for manufacturing production showing an increase in the monthly level, from -0.4% to +0.1%, but the annual level slid once again from 2.1% to 1.9%, enhancing the dire state of the UK’s industrial sector.

The main focus on the UK market will be today’s Bank of England meeting; even with the central bank expected not to make any change to either the key interest rate or the asset purchase target, last month’s meeting showed a shift in the voting towards providing further monetary stimulus, and the market will be looking for the next minutes release to see if there has been any advance on this.

The Euro again made some small gains against the Pound but fell against the US Dollar, the EUR/USD exchange rate coming down from 1.4083 at the mornings open to 1.4048 by the days close. There was some positive news though; with German industrial production figures showing a marked increase in both the monthly and annual levels; from 6.6% to 10.1 and from -1.0% to 4.0% respectively. After disappointing factory order figures the day before, it was a welcome boost for the Euro-zone, with some questions marks hanging over the current state of the strongest member state’s most important sector.

This morning has already seen the release of July’s German trade balance; which was a worse result than expected; the nations trade surplus contracting from 12.7 billion Euros to 10.4 billion; hardly surprising considering the release of last months export figures for the nation, which saw a sharp drop. There is a possibility that a strong currency is hindering Germany’s exporting capability; and it will be interesting to see if the ECB President; Jean-Claude Trichet faces any questions on the subject at today’s ECB rate meeting. Today’s ECB meeting is not expected to see any changes made to the base interest rate; or the central bank’s approach to bond-purchasing; but as always, one of the key factors will be the post-decision press conference; where the ECB President will give more insight into the central bank’s current thinking, and expectations for the coming months.

For the third day running, the US Dollar gained across the board in the currency exchange market, pushing back against the Euro and the Pound, the GBP/USD exchange rate falling from 1.6016 at the mornings open, down to 1.5941 by the end of the day. The release of the Federal Reserve’s Beige Book economic survey yesterday painted a fairly so-so picture of the overall economy. Local businesses reported little growth and some decline in sales, with manufacturers also giving a negative outlook. The service sector did see some improvements, but the housing market remained subdued; with the banking sector reporting little demand for loans, especially from consumers and commercial real estate companies. This could add more fuel to the argument that the Federal Reserve will need to undertake further monetary stimulus in the coming months (QE3), which would potentially see enhanced economic growth.

Today will see the release of July’s US trade balance figure; with the headline level expected to show a decrease in the nation’s trade deficit; from -53.1 billion dollars, to around -51.0 billion dollars. This would suggest either an increase in exports, or a drop in imports from the nation. With the Fed’s beige book survey yesterday revealing that auto retailers are struggling due to slower stock supply from Japan; this could be a contributing factor.

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

Foreign Exchange Daily Market Update 26/08/11

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The Pound ended yesterday almost unchanged against the Euro, but lower against the US Dollar in the foreign exchange market. The GBP/EUR exchange rate which opened at 1.1326 had a small pick-up mid afternoon, but ended the day at 1.1327. The GBP/USD exchange rate fell from the mornings open at 1.6372 to 1.6284 by the days close. The economic data released from the UK yesterday was negative, with CBI reported sales figures for August showing a marked decline, from -5 to -14. The main reason that the market attributed the Pound’s weakness against the Dollar however was the expectation that the Federal reserve Chairman Ben Bernanke will be announcing further monetary stimulus in the US today, which will help to improve the economic outlook for the US.

This morning has seen the final reading of 2nd quarter GDP from the UK. The result was unchanged from the previous reading with the annual growth rate showing 0.7% and the quarterly growth rate showing 0.2%. The currency market showed little reaction to the release, which was widely expected to be unchanged.

The Euro lost ground against the US Dollar following the increased positive sentiment towards the US, but the single-currency held firm against the Pound. The EUR/USD rate fell throughout the day, from 1.4454 down to 1.4374. There were no significant data releases from the Euro-zone yesterday to further affect movements on the currency exchange market.

Today’s European economic docket is devoid of any data releases, leaving the currency open to risk sentiment, and news from the world’s other major economies.

The US Dollar made good gains across the board yesterday, with increased positivity towards the nation anticipating the addition of further monetary stimulus - QE3 to the economy at Fed Chairman Bernanke’s speech at Jackson Hole this afternoon. Figures yesterday showed that the US labour market still remains a little unsteady though, with continuing claims falling for the month; from 3,721,000 to 3,641,000, but initial jobless claims increasing from 412,000 to 417,000.

This afternoon contains a lot of significant economic events for the US, with the potential to make big moves on the currency markets. Before Bernanke’s speech, we will see the final reading of 2nd quarter GDP from the US, as well as the University of Michigan confidence survey results for August. Despite the Dollar showing a marked appreciation through most of this week, any disappointments in terms of economic growth of confidence could be damaging to the currency.

The Market Team @ KBRFX

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