PhilBen

United Kingdom

Currency Market Update 07/12/09

The Pound Last week Corus Group Ltd., the European unit of India’s Tata Steel Ltd, cut 1,700 jobs after a group of four customers stopped buying metal. However sterling has stayed above the 1.10’s and with very little UK data out today we could see the 1.11’s. Speculation still remains regarding the government stance to the banking sector bonuses. The Dollar Employers in the U.S. cut the lowest number of jobs in November since the US recession began, this could indicate that the US recovery is lifting the labour market out of the worst employment slump in the post-World War II era. The Euro European Central Bank President Jean- Claude Trichet will be withdrawing stimulus measures quicker than economists had anticipated; this would open the door for higher interest rates next year. The ECB’s decision to end long term emergency loans will give greater flexibility to any rate increases in 2010 should the ECB deem them necessary. Interbank Rates at 8.46 am UK Time GBP-EURO 1.104 GBP-USD 1.635 GBP-AUD 1.799 Major Data out today UK Halifax House Prices (7th-11th) DE Factory orders CA Building permits JP Current Account Currency Exchange Service http://www.foreign -exchange-advice.i nfo  (Monday | post #1)

United Kingdom

The healthiest place in Britain: Somerset village where you are...

The Pound the service sector grew less than forecast in November, a purchasing managers' survey showed yesterday, however economists remained confident the economy should return to growth in the fourth quarter. Gordon Brown moved to dispel fears of a mass walk out by the board of RBS, saying it should not be singled out for unduly harsh treatment over bonuses, in an unseen move by MP’s to smooth the global backlash against large payouts to the bankers, Brown said nobody was being "discriminate d against" while the business secretary Peter Mandelson said he understood the concerns of RBS directors. Meanwhile the pound held its own and ranged all day around the 1.10 The Dollar Service industries in the U.S. unexpectedly contracted in November as companies lost confidence that the recovery will gather any strength. The Institute for Supply Management’s index of non- manufacturing businesses that make up almost 90 percent of the economy fell to 48.7 from 50.6 in October, according to the Tempe, Arizona-based group. With this in mind and a lot of US data out today anything negative could see investors returning to the dollar. The Euro European Central Bank President Jean- Claude Trichet claimed that the bank will scale back its emergency financing operations next year as the euro region starts an “uneven” recovery. “The improved conditions in financial markets have indicated that not all our liquidity measures are needed to the same extent as in the past,” Trichet said at a press conference in Frankfurt yesterday. This was after the ECB kept its benchmark interest rate at 1 percent, a record low. Interbank Rates at 8.24 am UK Time GBP-EURO 1.102 GBP-USD 1.661 GBP-AUD 1.794 Major Data out today CH CPI CA Net Change in Employment CA Unemployment US Hourly Earnings US Non-farm Payrolls US Unemployment Rate CA Ivey PMI Phil Bennetts Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo  (Friday Dec 4 | post #1)

United Kingdom

Currency Market Update 01/12/09

The Pound is still suffering from UK Banks involvement in Dubai, the uncertainty to how much money is involved and of course how much it could cost the tax payer. With investors now being even more cautious about investing in sterling, we could see more downside and this morning GBP remains well below 1.10 against the Euro and 1.65 on the Dollar. With Christmas fast approaching any upturn could be well into next year. That said in the new year the general elections could have a massive impact on how sterling will value and a small majority government could see investors pulling out of GBP completely as the UK will be seen to have a weak government. The Dollar with slight gains against sterling yesterday and a drop against the Euro, the dollar is just could be reliant on any Dubai news that comes in. Investors could look for safe assets and return to the trusted dollar. If this is the case any GBP and Euro gains over the last few days could be wiped out. The Euro CPI estimate for November moved up 0.6% from a year ago, its first forward move in 7 months and beat economists’ expectations for a 0.4% rise after falling 0.1% the previous month. This data indicates that the gain was primarily led by rising energy costs and higher commodity prices and could continue to heighten price pressures across the Euro-zone as the economy recovers from its worst downturn since World War II. The ECB is expected to keep its current policy later this week as growth prospects remain poor. However the Euro is still keeping the Pound and Dollar under pressure. The Australian Dollar Australia’s central bank has raised its benchmark interest rate by a quarter percentage point. This is the third straight month in a row and now points to the nation’s economy could be strengthening. Bank Governor Glenn Stevens increased the rate to 3.75 percent from 3.5 percent Interbank Rates at 8.24 am UK Time GBP-EURO 1.094 GBP-USD 1.647 GBP-AUD 1.795 Major Data out today UK Nationwide house prices Halifax House Prices (1st-4th) DE Retail Sales EU Unemployment US Pending Home Sales Phil Bennetts Currency Exchange Service http://www.foreign -exchange-advice.i nfo  (Tuesday Dec 1 | post #1)

United Kingdom

Currency Market Update 16/11/09

The Pound a report from Rightmove PLC has stated that for the first time in three months UK house sellers have been asked to reduce house prices as demand dwindles leading into Christmas. The average price fell by 1.6% to £226.440.00 from October when they rose by 2.8%. Meanwhile the currency has shaken off the down trend from last week and opens this morning on a positive note against both the Euro and the Dollar. The Dollar fell again against the majors on Friday after the US government said the trade deficit had widened in September. This lured investors away from the safe-haven dollar. The trend still indicates that investors approach in the market is still that of risk rather than a cautious approach. The Euro speculation is growing that the ECB could raise interest rates in the near future. Investors are claiming the Euro is the one currency to watch. With a rate increase, we could see the Euro making even further gains against the pound and the dollar. However we could see some resistance to the increase as business in the Euro zone could suffer. Short term the Euro zone has some big data out today anything released that could be considered negative; we could see sterling head towards 1.13’s Interbank Rates at 8.10am UK time GBP-EURO 1.115 GBP-USD 1.672 GBP – AUD 1.79 Major Data out Today EURO HICP US Empire State Survey US Retail Sales US Retail Sales Ex Autos JP METI Tertiary activity index Phil Bennetts Currency Exchange Service http://www.foreign -exchange-advice.i nfo  (Monday Nov 16 | post #1)

United Kingdom

Currency Exchange Update 12/11/09

The Pound yesterday had a mixed bag of data and fell below the 1.11 on the Euro and 1.66 on the Dollar. The number of people unemployed in the UK rose slightly in the three months to September; however it was the smallest increase since May 2008. The jobless rate moved up to 7.8% from 7.7%, but the youth unemployment rate rose by a staggering19.8%. The number of people claiming unemployment benefit also rose by 12,900 to 1.64 million in October. Bank of England governor Mervyn King said yesterday The UK economy has "only just started" along its road to economic recovery. The Dollar enjoyed some rest bite against the Pound and Euro yesterday however it still remains under pressure as investors continue to seek riskier assets. The Euro with very little data out yesterday the Euro made gains against Stirling pushing it back below the 1.11.But fell against the Dollar to below 1.50 All eyes will be on France today as current account data is being released. The Australian Dollar Australia's economy unexpectedly created more jobs than in October, with more than 24,000 people finding new employment. It is the second monthly gain in a row and analysts speculating that interest rates could be increased in December from 3.5% to 3.75%. Interbank Rates 8.50am UK time GBP-EURO 1.104 GBP-USD 1.653 GBP-AUD 1.772 Major data out today AU Employment AU Unemployment FR Current Account US Initial Claims CA House Price Index Phil Bennetts Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo  (Thursday Nov 12 | post #1)

United Kingdom

Currency Market Update 11/11/09

The Pound has regained some momentum this morning after the shock reaction of the debts of the UK’s AAA rating yesterday. However with the Unemployment Rate and Claimant Count data out today we could see a Holt on any uptrend short term. Stirling opened this morning on a positive foot against the dollar and has stayed the same against the Euro The Dollar still facing much uncertainty against most of the majors, we could see more down turn over the coming weeks. This however could reverse if world economic data forces investors to retreat to a safe haven currency. Interbank Rates at 8.25 am UK GBP-EURO 1.114 GBP-USD 1.675 GBP-AUD 1.794 Major data out today UK Claimant Count UK Unemployment Rate UK BoE release Quarterly Inflation Report NZ Retail Sales Phil Bennetts http://www.foreign -exchange-advice.i nfo  (Wednesday Nov 11 | post #1)

United Kingdom

Currency Market Update 05/11/04

The Pound continued to make ground against both the Euro and the dollar yesterday; it broke 1.12 on the Euro and 1.65 on the dollar. However it has fallen back against the Euro in early trading sessions this morning. All eyes will be on the BOE interest rate decision later today. Anything that comes out of the meeting with a positive stance will give Stirling a much needed lift. The Dollar declined against the pound yesterday but made gains the Euro after the Federal Reserve kept its interest rate the same and promised to keep it to help the fragile economic recovery. It will be interesting to see over the next few days if investors will return to safer assets such as the dollar Major Data out today AU Trade Balance UK Industrial Production UK Manufacturing Production EURO Retail Trade UK BoE MPC interest rate announcement EURO ECB interest rate announcement US Initial Claims CA Building permits UK NIESR GDP Est. CA Ivey PMI Phil Bennetts Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo/money_transfer s.htm  (Nov 5, 2009 | post #1)

United Kingdom

Currency Market Update 04/11/09

The Pound Still holding its own against the majors so far this week, however the Bank of England and the ECB meet tomorrow to announce the interest rate decisions, any unexpected announcements could have a massive impact in the pounds direction. Meanwhile On Tuesday, two UK banks announced large capital raises. Lloyd Bank will try to raise at least another 21 billion pounds. Royal Bank of Scotland PLC will get another 25.5 billion pounds from a strapped for cash government, whose stake in the company will rise to over 80 % from 70 %. The Dollar has been a mixed bag this week amid major bank restructurings in Europe, while U.S. factory orders rebounded and investors looked ahead to central bank meetings in the U.S. and Europe. The dollar still seems to be losing ground against the pound as investors are still looking to invest in more risky assets. Australian Dollar Australia raised its benchmark interest rate by a 0.25 % for the second straight month; Australia is now the only nation to increase borrowing costs twice this year. However retail sales unexpectedly dropped in September, driving down the currency, this may make the Dollar less attractive to investors and look for other risky assets. After yesterday’s rate increase central bank governor Glenn Stevens may put a hold on any more interest rate increases in the near future as the economy could start to wobble. Live Rates at 8.20 am UK GBP-EURO 1.116 GBP-USD 1.648 GBP-AUD 1.819 Major Data out Today AU Building approvals AU Retail trade (already out -0.2) UK Nationwide Consumer Confidence EURO PPI US ADP Employment US FOMC interest rate announcement Phil Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo  (Nov 4, 2009 | post #1)

United Kingdom

Currency Market Update 03/11/09

The Pound on Monday bowed to the currency’s unwanted correlation to risk appetite. The Home track Housing survey for October reported home prices grew for a third time. More amazing was the CIPS/Market Manufacturing PMI survey for the same period. The factory sector grew at its fastest pace in nearly two years. This could affect BoE’s rate decision this Thursday; it may also put a hold on increasing the bond purchasing program. Perhaps the MPC’s economic and inflation forecasts could hold a brighter outlook than traders are currently forecasting. The Dollar mainly unchanged from last week’s lows. However manufacturing industry grew at the fastest pace in October since April 2006, according to the Institute for Supply Management. The ISM manufacturing index clocked in at 55.7, much better than the 53 economists had expected. It was the third month in a row the index came in above 50, which indicates growth. In recent trends Investors sell the dollar in favor of riskier, higher-yielding currencies and stocks when strong economic reports The Euro Europe could join the few in leaving the recession when growth figures come out next month. However poor jobs and inflation data released Friday strongly suggest the euro-zone recovery will be slow and fragile. Major data out today NZ Commodity Prices UK Halifax House Price Index (3rd-6th) Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo/compare_money_ transfers.htm  (Nov 3, 2009 | post #1)

World News

Currency Market Update16/10/09

The Pound rebounds against all the majors on speculation that BoE could pause quantitative easing. BoE Markets Director Paul Fisher said that he has more confidence now that quantitative easing is "having the scale and speed of impact that we would have hoped for when we started" in March. He also hinted MPC might opt to pause quantitative easing to give the BOE an option of "doing more later". This is endorsing the comments from Deputy Governor Charles Bean that BoE "will need to gradually remove the monetary stimulus that we have imparted to the economy, otherwise we will be in danger of overshooting our 2 percent inflation target. The dollar was mixed against majors on Thursday following better-than-expect ed economic data about inflation and jobless claims. The dollar gained 1.32% against the yen, but fell against the euro and the pound. The Euro has come under increasing pressure after the September consumer price report showed that inflation has fallen for a fourth month in a row. The 0.3% decline from a year ago in the headline reading was unchanged from August. However the decline from 1.3% to 1.2% in the core component is evidence that deflationary pressure will remain. Despite expectations of a 0.1% increase during the month prices were flat despite and were offset by declines in energy and housing markets. The ECB stated in their monthly bulletin that they expected low inflationary pressure over the medium term. Phil Bennetts Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo  (Oct 16, 2009 | post #1)

United Kingdom

Currency Market Update 24/09/09

The Pound made gains against the Euro and the Dollar yesterday after the release of the minutes to the Bank of England September meeting following what now appears to be unanimous consensus on the way forward. At previous meetings it was evident there was a push by a few members, namely the governor Mervyn King, to increase the amount of asset purchases from 175 billion Pounds to 200 billion. In a separate report the Confederation of British Industry raised its forecast for third quarter economic growth also signalling that the BoE may in fact move towards capping the plan in the foreseeable future. The Dollar declined against the Pound while making gains against the Euro yesterday. The FOMC voted unanimously to keep the Fed Funds rate between zero and 0.25% for an extended period of time. There were no hawkish rumblings, as some expected, rather an acknowledgment of some economic recovery accompanied by resource slack and little inflation pressure. Further, the agency and MBS debt purchase program was extended by three months, now ending in March 2010. The Euro declined against the Dollar and the Pound yesterday, hindered by a smaller than expected preliminary Services PMI, The Services PMI rose to 50.6, the first month of expansion in the indictor in 16 months, while manufacturing remained below the 50 level. Also to note a second report on industrial orders increased for a second straight month in July and orders rose 2.6% from June. The data implies that the recovery in the Euro-zone could be gathering strength though there are still concerns regarding rising unemployment and low investment by companies seeing low capacity-utilizati on rates. Data released 24th September 2009 US 13.30 Initial Jobless Claims (w/e 19th September) US 15.00 Existing Home Sales (August) Phil Bennetts Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo  (Sep 24, 2009 | post #1)

United Kingdom

Currency Market Update 23/09/09

The Pound made gains against the Euro and the Dollar yesterday as Sterling traded sideways in Asia and rallied in European session due to greenback's broad-based weakness. Cable continued to move higher in U.S. session as strong equity markets encouraged demand in high-yielding currencies. Also to note the dovish comments from BOE Governor, Mervyn King, last week are still weighing heavily on the Pound. The Dollar declined against the Pound and while hitting fresh annual lows against the Euro yesterday as the market anticipates the Fed will leave its policy rate unchanged at 0-0.25% today, minimizing the appeal of the U.S Dollar. Data released 23rd September 2009 UK 09.30 BoE Monetary Policy Committee Minutes - 9/10th September Meeting EU 10.00 Industrial Orders (July) US 19.15 FOMC Interest Rate Announcement  (Sep 23, 2009 | post #1)

United Kingdom

Currency Market Update 21/09/09

The Pound declined heavily against the Euro and the Dollar on Friday. With ongoing fragility of the UK banking sector, the Pound came under pressure after news that the UK government was tightening the terms for one of the nation’s banks to exit its asset-protection scheme. Lloyds Banking Group announced they were in talks over a possible reduction in the number of toxic assets it may place in the so-called asset protection scheme after Friday’s tougher-than-expec ted capital conditions set forth by the Financial Services Authority. The Dollar made considerable gains against the Pound while declining against the Euro as waning risk appetite helped boost the US dollar. Without much economic news due out today, many investors will likely take their cue from flows in equity and commodity markets. Global equity came under pressure today as investors took stock of recent hefty gains and oil prices slipped below $72 a barrel, helping to reprieve the downtrodden Dollar. Unemployment rose in 27 states in August, with California and Nevada reaching record levels of joblessness at 12.2% and 13.2% respectively. Many analysts are forecasting unemployment to reach 10% this year. The Euro made gains against the Dollar and the Euro on Friday. As hopes for a global recovery continue to provide support for riskier assets while the Euro zone’s current account balance came in at a 6.6 billion Euros surplus, and German producer prices increased by 0.5% month over month in August. Data released 21st September 2009 US 15.00 Leading Indicators (August) Phil Bennetts Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo  (Sep 21, 2009 | post #1)

United Kingdom

Currency Market Update 18/09/09

The Pound made gains against the Dollar while remaining relativity unchanged against the Euro yesterday on resilient risk appetite but pulled back slightly after weaker than expected UK retail sales data. Many analysts expected a 0.1% rise on the month, but data from the Office for National Statistics said Augusts’ unchanged reading took the annual rate of growth in retail sales volume down to 2.1%. Data from the Confederation of British industry reported manufacturing orders fell slightly less than expected. The Dollar declined against the Pound and the Euro yesterday. Data from the Labour Department reported jobless claims declined 12,000 to 545,000 last week, while those still on the benefit rose to 6.23. The Commerce Department reported better than expected data as housing starts and permits rose 1.5% in August to their highest level since November, mainly due to a rebound in multifamily homes. The Philadelphia Fed Business Activity also reported business activity index was 14.1 in September vs. 4.2 in August. Reading above zero indicates expansion in the region’s manufacturing sector. The Euro made gains against the Pound and touched a one-year high against the Dollar overnight as risk appetite increased among investors. Data from the European Union’s statistics office Eurostat reported Eurozone exports continued to recover in July and drove the trade surplus higher than expected. Also to note the trade balance was a 6.8 billion euro surplus, up from 2.3 billion in June. Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo Information on money transfers http://www.foreign -exchange-advice.i nfo/questionsandan swers.htm  (Sep 18, 2009 | post #1)

Swindon, England

Currency Market Update 17/09/09

The Pound made slight gains against Dollar while declining against the Euro in the wake of yesterday’s dovish comments by the UK central bank. UK labour data showed jobless benefits rose by 24,000 in August which was broadly in line with expectations. International Labour Organization measure of unemployment rose by 210,000 in the three months to July, pushing jobless rates to 7.9%, the highest since November 1996. With global recovery the current main theme, traders will be looking initially at today’s UK retail sales and CBI industrial trends survey and then to US data for direction. The Dollar declined against the Pound and the Euro as world stocks hit an 11-month high and disappointing data releases. Data from the US Treasury showed net overall capital outflows increased to $97.5 billion in July from a revised $56.8 billion the previous month. The Consumer Price Index rose 0.4% in August mainly due to higher gasoline costs, while industrial output increased for a second consecutive month. Data from the Mortgage Bankers Association indicated demand for home loans fell last week as fixed mortgage rates rose in the holiday-shortened week. The Euro made gains against the Pound and the Dollar yesterday following Data from the Eurozone showed falling energy prices kept inflation in negative territory in August, firming the case for the European Central Bank to keep interest rates steady. Data from the European Union statistics office (Euro stat) showed consumer prices in the Eurozone increased 0.3% on the month and dipped 0.2% from a year earlier. Data released 17th September 2009 UK 09.30 Retail Sales (August) EU 10.00 Foreign Trade Balance (July) UK 11.00 CBI Industrial Orders (September) US 13.30 Housing Starts (August) Permits 0.564m US 13.30 Initial Jobless Claims (w/e 12th Sept) US 15.00 Philly Fed Business Survey (September) Foreign Exchange Explained http://www.foreign -exchange-advice.i nfo  (Sep 17, 2009 | post #1)