The Pound slipped further against the Euro yesterday, not the news that consumers who are buying Euros were looking for. The GBP/EUR rate dropped from 1.1163 at the morning’s open, to trade at 1.1142 by the end of the day. There was better news for people buying Dollars though, as the rate picked up from 1.5982, to break back through the 1.60 barrier, with the GBP/USD exchange rate closing the day at 1.6018. The Pound was not helped by the final reading of 1st quarter UK GDP, which although showed no change in the quarterly growth rate of 0.5%, the annual figure was revised downwards from 1.8% to 1.6%. This is a real blow for economic growth prospects in the UK, and the foreign exchange market showed its negative response to this news with the rates dropping as the figures were released.
Today’s economic docket from the UK has seen mortgage approvals show a slight monthly increase, up from 45,400 to 45,900; a positive increase, but falling below the market expectations for a reading closer to 46,300. There are no other figures of real economic note set for release from the UK, but one major piece of news from Europe could well have a big effect on any movements in the currency exchange market.
Following a day of gains against both the Pound and the US Dollar, the Euro will be open to the possibility of sharp movements today. As well as the release of Euro-zone consumer confidence figures, the market will be focusing on the outcome of a vote in the Greek Parliament on austerity measures. For any solutions to be implemented and the IMF to give Greece access to extra funding, this austerity measure bill will need to be passed in Parliament. The market could see a sharp reaction if there is any fallout, and the minute possibility that the bill will not be passed.
The US Dollar did weaken slightly against the Euro and the Pound across the course of yesterday; and the currency was not helped by a poor market reaction to US consumer confidence figures. With the market forecasting only a small drop, from 61.7 to 61.0, the actual figure reported a huge drop down to 58.5. This shows that positive sentiment from the US consumer has fallen significantly, and could be an early indication of a slowdown in personal income and consumer spending, which would translate to an overall slowdown in economic growth.
Today’s US economic docket will see the release of pending home sales figures, and the market will be looking to see if there is any positive support from the housing sector. With the labour market weakening, and also consumer expectations lowering, the currency will need to see some positive sings from this sector if there are to be any gains.
KBR Foreign Exchange Plc. - Currency Experts. Foreign Exchange, International Payments, Money Transfers
Wednesday, 29 June 2011
Tuesday, 28 June 2011
Foreign Exchange Daily Market Update 28/06/11
The Pound closed lower against the Euro, but higher against the US Dollar in the foreign exchange market yesterday. The GBP/EUR exchange rate fell from 1.1270 to 1.1179 through the course of the day, putting pressure on UK consumers who are buying Euros. There was a welcome boost for people buying Dollars though, as the rate moved up from the morning’s low of 1.5930, to break the 1.60 barrier, before falling back slightly to 1.5975 by the end of the day.
There were no economic data releases from the UK yesterday to affect the movement of the currency. Today however will see the release of the final reading of 1st quarter UK GDP. With the quarterly growth rate expected to be confirmed at a level of 0.50% and annually at 1.8%, it is not an entirely impressive outlook for the UK economy, but better than any signs of a drop in growth, which would indicate an economic slowdown. Final figures for total 1st quarter business investment are also set for release, with the market forecasting no change from the previous reading of 3.2%. One figure that may give a positive boost to the Pound though is the UK’s current account balance reading for the 1st quarter; which is expected to see a reduction in the deficit from -10.5billion pounds to -4.7 billion pounds.
The Euro continued to find strength against the Pound and the US Dollar yesterday. The EUR/USD rate closed at 1.4279, a fair movement up from the morning’s level of 1.4134. The only low-level economic data to be released from Europe yesterday were figures showing that Italian hourly wages dropped slightly month-on-month, but held steady annually. The market was not really pushed by this news, as it doesn’t have any real bearing on the overall economic outlook for the Euro-zone.
Today has already seen the release of German GfK consumer confidence for July, which saw an upward movement in the reading, suggesting that sentiment across German society in regards to the economic outlook and their own personal spending is improving. There are a few figures of small economic importance to be released throughout the rest of the day, with Italian producer prices and French total jobseekers claims set for release. These figures though are likely to have little to no impact on the currency exchange market.
The Dollar weakened against the Pound and the Euro yesterday, and the economic docket did little to halt the slide. Figures released yesterday showed that personal income in the US has stagnated, at a level of 0.3%, while personal spending has dropped, from 0.3% to 0.00%, suggesting that wages are not increasing across the country, and regardless of this, consumers are holding onto their money; which is not good for the economy.
The market will focus on US consumer confidence figures that will be released today. The market has forecast a slight increase in consumer confidence, which would be positive for the US currency, as it would indicate a perceived improvement in business conditions, employment and personal spending.
Mike Hood
KBRFX
There were no economic data releases from the UK yesterday to affect the movement of the currency. Today however will see the release of the final reading of 1st quarter UK GDP. With the quarterly growth rate expected to be confirmed at a level of 0.50% and annually at 1.8%, it is not an entirely impressive outlook for the UK economy, but better than any signs of a drop in growth, which would indicate an economic slowdown. Final figures for total 1st quarter business investment are also set for release, with the market forecasting no change from the previous reading of 3.2%. One figure that may give a positive boost to the Pound though is the UK’s current account balance reading for the 1st quarter; which is expected to see a reduction in the deficit from -10.5billion pounds to -4.7 billion pounds.
The Euro continued to find strength against the Pound and the US Dollar yesterday. The EUR/USD rate closed at 1.4279, a fair movement up from the morning’s level of 1.4134. The only low-level economic data to be released from Europe yesterday were figures showing that Italian hourly wages dropped slightly month-on-month, but held steady annually. The market was not really pushed by this news, as it doesn’t have any real bearing on the overall economic outlook for the Euro-zone.
Today has already seen the release of German GfK consumer confidence for July, which saw an upward movement in the reading, suggesting that sentiment across German society in regards to the economic outlook and their own personal spending is improving. There are a few figures of small economic importance to be released throughout the rest of the day, with Italian producer prices and French total jobseekers claims set for release. These figures though are likely to have little to no impact on the currency exchange market.
The Dollar weakened against the Pound and the Euro yesterday, and the economic docket did little to halt the slide. Figures released yesterday showed that personal income in the US has stagnated, at a level of 0.3%, while personal spending has dropped, from 0.3% to 0.00%, suggesting that wages are not increasing across the country, and regardless of this, consumers are holding onto their money; which is not good for the economy.
The market will focus on US consumer confidence figures that will be released today. The market has forecast a slight increase in consumer confidence, which would be positive for the US currency, as it would indicate a perceived improvement in business conditions, employment and personal spending.
Mike Hood
KBRFX
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