Currency Market - Updated Regularly

[PhilBen]

Another good report. Thanks. To me all this uncertainty over Greece, the UK election and economic recovery generally plays well for the dollar. It's had a good run but could do even better in the next month or so, particularly as the economic news seems better out of the States. Long term I don't believe in the US economic recovery or the dollar.

You are quite right but I think the powers to be won't let the dollar suffer much. Unlike the Pound who once again seems to be the kicking boy of currency.

[PhilBen]

The Pound with very little data out today the pound breaks above the 1.11’s.
However this could be very short lived with retail sales and Visible Trade Balance, data out tomorrow. Mean while speculation still grows on the on the failing economy after the Chambers of Commerce release a report claiming that GDP will grow slower than Government forecasts. This could hinder any hopes of a full recovery short or possibly long term.

The Dollar Briefly slipped below 1.50 against sterling on Friday after the release of better-than-expected U.S. NFP data, sterling resisted any further gains and climbed back above the 1.51’s on the open this morning.

The Euro we could see a lot of movement this week on the Euro with the Greek credit woes still remain the main issue with investors. With lots of UK, US and Euro data out all eyes will be the Pound and how it responds under pressure.
The Euro Major Data out Today
DE Industrial Production
CA Housing starts

Live IB rates at 9.50 am UK
GBP - EURO 1.109
GBP - USD 1.516
GBP - AUD 1.661
EURO – USD 1.366

[PhilBen]

The Pound The Royal Institution of Chartered Surveyors has claimed new instructions outpaced enquires from new buyers in February. This is the second month in a row. The rise in house prices during the past year has been attributed by many commentators to a shortage of stock for sale. Meanwhile Retail sales had some recovery from a tough January on the High Street, figures from the British Retail Consortium showed that Like-for-like sales were up 2.2%, compared to the 0.7% fall in January.

The Dollar looks set to steam ahead into the 1.40’s against the pound as it breaks the 1.50 level with conviction. The markets have opened this morning pound negative as the Dollar once again gains on both the Pound and Euro.

The Euro Greek prime minister has called on the US to help curb the financial speculators. He blames the speculators for exacerbating his country's debt problems. George Papandreou said he wanted to see the US impose stricter regulations on hedge funds and currency traders.

Major Data out Today
UK BRC Retail Sales Monitor (Total)
UK RICS Housing Survey
JP Leading indicator (P)
AU NAB Business Confidence
CH CPI
UK Trade Balance, Non-EU
UK Visible Trade Balance, World
AU Westpac Consumer Confidence

Live IB rates at 9.35am UK
GBP - EURO 1.1007
GBP - USD 1.495
GBP - AUD 1.648
EURO – USD 1.357

[PhilBen]

The Pound The UK's trade gap with the rest of the world widened in January to its largest since August 2008. Exports saw their biggest drop in over three years, according to the Office for National Statistics. The UK's trade gap in goods and services widened to £3.8bn, compared with £2.6bn in December. The news came as a disappointment and caused the pound to weaken, below 1.10 on the Euro and below 1.50 on the US Dollar. It was believed that sterling is so weak against most of the majors that UK exports would increase as other countries would take advantage of the cheap Pound. The brains of Briton failed to recognize one thing. We have to have a manufacturing base to have a large amount of exports. Shadow business secretary Ken Clarke said: "We need to build a new economic model based on saving, investment and exports instead of the debt-fuelled model of the last decade."

Meanwhile in an interview on Sky News yesterday Adam Posen said BOE officials are counting on their 200 billion-pound bond-purchase program to have succeeded in restoring the economy to growth. “ We believe growth will pick up from here,” Posen said. “It’s not going to go gangbusters. We had to go down from what we said before, but it’s still going to be strong. And in that case, there’s no need for more quantitative easing.”

A big day today for both the UK and the Euro-zone, we could see a lot of movement and possibly the Dollar will once again take advantage of both currencies.

Major Data out Today
AU Housing Finance
DE Current Account (nsa)
DE Trade Balance
DE Current Account (nsa)
DE Trade Balance
DE CPI (F)
DE HICP (F)
UK Industrial Production
UK NIESR GDP Est
JP GDP (F)

Live IB rates at 5.55am UK
GBP - EURO 1.1007
GBP - USD 1.497
GBP - AUD 1.635
EURO – USD 1.359

[PhilBen]

The Pound The Office for National Statistics has said that Industrial production in the UK fell unexpectedly in January, as the cold weather restricted companies working time. Output fell by 0.4% compared with December. Analysts had expected a rise of 0.3%. Very Strong December figures and extreme icy weather were to blame for the biggest monthly drop since August. Total Manufacturing output fell 0.9%, again adding to fears for a very fragile UK recovery.

The Dollar US employers cut fewer jobs than expected in February, The total amount was 36,000 and was far better than analysts had been expecting. The Construction industry, one of the largest sectors lost jobs but an increase in temporary positions helped bolster the figures. Last month's unemployment rate stayed the same as in January at 9.7%. Meanwhile The US trade deficit climbed to $40.2bn or £25.7bn in December, it is claimed the increase is partly due to a 14.8% increase in oil imports. The Commerce Department said exports totalled $142.7bn dollars while imports totalled $182.9bn

The Euro US President Barack Obama has "responded positively" to calls to clamp down on market speculators, the Greek PM said after talks in Washington. George Papandreou said the president had shown his support for Greece, and that the issue would be on the agenda of the next G20 meeting. Not helping Greece or the Euro is the planned walkout by Greece’s workers today. Hospitals, airports and schools will all be involved in the country’s second general strike this year. The unions are protesting about Prime Minister George Papandreou’s latest round of budget cuts to curb the European Union’s biggest deficit.

Meanwhile Germany’s exports unexpectedly slumped in January, ending a four-month streak of gains. Sales abroad, plunged 6.3 % from the previous month, when they rose 3.4 %

Major Data out Today
AU Employment
AU Unemployment
CA House Price Index
CA Merchandise trade
US Initial Claims
US Trade Balance
NZ Retail Sales

Live IB rates at 6.05 am UK
GBP - EURO 1.097
GBP - USD 1.497
GBP - AUD 1.636
EURO – USD 1.364

[PhilBen]

The Pound The number of houses sold in England and Wales fell at the start of 2010. A 52% drop not seen since the beginning of the recession. The bad weather and the end of stamp duty relief are being blamed for the slump. Meanwhile speaking to the BBC Chancellor Alistair Darling has warned people not to expect a "giveaway" when the government's Budget is announced later this month. Mr Darling said that the Budget would be "sensible" and "reflect the times in which we live". He also reaffirmed his commitment to halve the country's budget deficit over a four-year period. If he fails he can always blame it on the weather.

The Dollar U.S. Census Bureau has announced that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation, holiday and trading-day differences, but not for price changes, were $355.8 billion, an increase of 0.5 % from the previous month and 4.7 % above January 2009. Total sales for the November 2009 through January 2010 period were up 4.3 % from the same period a year ago. The November - December 2009 % change was revised from -0.3 % to -0.1 %. Retail trade sales were up 0.5 % from December 2009 and 5.3 % above last year. Petrol stations sales were up 29.0 % from January 2009 and non store retailers sales were up 12.4 % from last year. Meanwhile Standard & Poor's released a statement that the dollar's role as global reserve currency has not been challenged by the global credit crunch. The report warned the U.S. not to take the dollar's role for granted. Unless it addresses its fiscal deficit and debt, foreign investors could start to reduce dollar holdings, pushing rates higher and undermining the economy, which in turn could threaten the U.S.'s triple-A rating.

The Euro Good news for Volkswagen, a second consecutive record year for deliveries and BMW, helped by the new 5-Series sedan, aims for an increase in sales as China, Brazil and the U.S. propel a recovery in the global car market. Volkswagen’s car, sport-utility vehicle and commercial-van sales rose 27 % in the first two months of 2010, outpacing industry growth of 20 %

Major Data out Today
JP Industrial Production (F)
CA Net Change in Employment
CA Unemployment
US Retail Sales
US Retail Sales Ex Autos
US Univ of Mich Sent. (P)

Live IB rates at 5.59 am UK
GBP - EURO 1.099
GBP - USD 1.505
GBP - AUD 1.643
EURO – USD 1.369

[PhilBen]

The Pound Greater market optimism fuelled a broad-based sterling rally the end of last week, after a news report showed the Bank of England’s ‘approval rating’ to be at its highest since March2007 and a further survey suggested analysts expectations for higher interest rate in the UK was now at a greater than 50% chance for a hike by the end of 2010. However this could be short lived amid fears a hung parliament is more likely to happen.

The Dollar has retained its position as the key international currency, contributing to the 'AAA' rating on its government, Standard & Poor's Ratings Services said in a report published on Thursday. The article, which is titled "Après Le Déluge, the US Dollar Remains the main International Currency. "If the dollar did not have this role, we believe that the US would not have such ready access to external financing, interest rates would have to rise to attract higher domestic savings, and potential growth would fall," according to John Chambers, chairman of Standard & Poor's sovereign rating committee.

The Euro with a relatively quite day in data today, Stirling could make some advances against the Euro and the Dollar. The Euro has also seen some strength against the Dollar. This trend could gain momentum now the Greece issues have been fully digested.

Major Data out Today
UK BoE release Quarterly Bulletin
UK Rightmove House Prices
US Empire State Survey
US Treasury International Capital System (TICS)

Live IB rates at 7.04 am UK
GBP - EURO 1.104
GBP - USD 1.518
GBP- AUD 1.658
EURO - USD 1.374

[PhilBen]

The Pound - A short lived high 1.1051 on the Euro and 1.5205 on the Dollar yesterday gave some hope of some momentum in sterling’s favour. However an EU Commission report to be published on Wednesday states that the government's plans for reducing the budget deficit are not ambitious enough. The report warns that the UK is not on course to cut its deficit in line with EU rules by a deadline of 2015. Those rules say deficits must be below 3% of GDP, but the UK's is expected to hit 12.6% of GDP - this year. In fact the UK has the worst percentage out of all the major countries in the Euro-zone and that includes Greece.

Budget Deficit figs as % of GDP
UK 13%
Greece 12.5%
Spain 11.25%
Ireland 11.25%
Italy 5.3%
Germany 3.5%
Source: European Commission 2009

Rightmove’s house price index fell sharply for the month of March coming in at 0.1% versus 3.2% in February. The release yesterday had no immediate impact on the pound as equity markets initially opened in a positive territory. It will be interesting this morning to see how the markets react if any to the fight between Gordon Brown and one of his biggest financial backers the Unite Union. With a lot of Euro and US data out today we could see some major moves.

Major Data out Today
FR CPI
FR HICP
DE ZEW (Current Conditions)
DE ZEW (Economic Sentiment)
EU ZEW (Economic Sentiment)
EU HICP - Core (F)
EU HICP (F)
US Housing Starts
US Import prices
US FOMC interest rate announcement

Live IB rates at 5.00 am UK
GBP - EURO 1.098
GBP - USD 1.505
GBP- AUD 1.644
EURO - USD 1.369

[PhilBen]

The Pound - Besides political polls, drags on the pound increase. Moody's questioned UK's AAA ratings again due to high budget deficit and the few proposed solutions to tackle it. Further, BOE Barker highlighted the risk of a double-dip recession. We keep our view that the pound is likely to stay weak for now. Meanwhile BOE Deputy Governor Charles Bean said price pressures in the U.K. have been unexpectedly strong, suggesting that a sustained recovery might fuel faster inflation. “The extent of the downward pressure on inflation from spare capacity is also uncertain,” Bean said in a speech yesterday. “Once one allows for the effect of transient factors such as the restoration of the VAT rate, oil price movements and the likely impact of sterling’s depreciation, underlying inflation has been surprisingly resilient.” Inflation accelerated in January to a 14-month high of 3.5 %, above the government’s upper limit. The BOE kept its 200 billion-pound bond purchase program on hold for a second month in March as officials assessed if the recovery is strong enough to last.

The USD - House starts in the U.S. fell in February by 5.9 % as record snowfall in parts of the country hampered construction, while fewer building permits highlighted demand is slowing down.

The Euro - gained some early support on Tuesday as EU employment improved but again with the EU finance ministers meeting gains these were limited despite general support for an aid package should Greece require one.

Major Data out Today
UK Claimant Count
UK ILO Unemployment Rate
US PPI
US PPI ex food and energy

Live IB rates at 8.15 am UK
GBP - EURO 1.103
GBP - USD 1.521
GBP- AUD 1.653
EURO - USD 1.378

[PhilBen]

The Pound - Makes a comeback and pushes above the 1.11’s on the Euro and 1.52’s against the Dollar after the number of people unemployed in the UK fell again, leaving the jobless rate at 7.8%. Total unemployment stood at 2.45 million for the three months to January, down 33,000 on the previous three months. Long-term unemployment, however, rose by 61,000 to 687,000. Also London-based strategist at Shore Capital Gerard Lane said “Interest rates are likely to stay low for some time. We have a political agenda to bring in some significant fiscal tightening, which will probably mean rates will stay lower for longer than elsewhere”

Gordon Brown’s government spent more than 780 million pounds on reorganizing its departments with no way of tracking any tangible benefits of the changes, according to a National Audit Office report out today. It seems the changes made since the 2005 general election are impossible to show that they offered any value for money and the report also claimed there was a risk that public bodies were carrying out reorganizations “unnecessarily.”

With a lot of Euro and US data out today we could see a lot of movement in the markets.

Major Data out Today
EU Current account (nsa)
EU Current account (sa)
EU Trade balance (nsa)
EU Trade balance (sa)
UK CBI Industrial Trends
US Current account
US Initial Claims
US CPI
US CPI ex food and energy
US Philadelphia Fed Survey

Live IB rates at 4.39 am UK
GBP - EURO 1.115
GBP - USD 1.53
GBP- AUD 1.657