Forex market report 27/03/09

  • Sterling trades lower against the Euro
  • Survey shows people want end to the public spending boom in UK
  • The European Central Bank likely to cut interest rates next week
  • The euro remained inside its recent tight ranges against the USD
  • The “city” prepares for G20 summit next week

US Dollar: The USD continued to trade higher against the pound this morning into the early 1.44 area, and within tight ranges against the Euro at 1.3540. The US economy shrunk by less than expected in the last quarter 0f 2004. The figure came out at –6.3% better than the -6.5% expected but worse than the initial estimate of –6.2%. Jobless claims in the US were slightly worse than expected at 652k against 646k expected. Traders reported that the USD is unlikely to continue falling, because many short-term-focused investors are refraining from dealing actively ahead of an event-rich next week including the G20 meeting and ECB/UK rate decisions. “Short-term players wouldn’t be able to trade actively today because we have a plenty of events that could set a long-term trend for the currency market,” said Hiroshi Maeba, a senior dealer at Nomura Securities. Data: 12:30pm Core PCE Price Index exp 0.1% prev .01% Personal spending exp 0.2% prev .06% Personal Income exp -0.1% prev 0.4% 13:55pm Revised UoM Consumer Sentiment

Pound: Sterling has continued to struggle against the Euro and USD in the last few days moving into the low 1.06 area this morning and 1.44 against the USD before the current account deficit figure due at 9.30am. A recent survey published in the Telegraph showed that 1 in 10 people in the UK want an end to the public spending boom of the labour years. April is likely to prove a critical month for the Government with the Budget announced later in the month. The financial district in London known as the city is preparing for a busy week– an agreement has now been reached on many of the steps that can help restore global economic growth through enhanced international coordination, and on further measures to be recommended to the leaders at the London Summit on 2 April according to Data: Current Account exp –5.B

Euro: The euro remained inside its recent tight range against the dollar yesterday, but did make gains on the pound. EUR/USD traded between $1.35 – $1.36, while the single currency took over 1% off sterling to trade at an intraday high of 0.9411. Analysts say that considering the U.S. Federal Reserve’s quantitative easing, the euro is unlikely to stay down for long, as the ECB is unlikely to be as aggressive as the U.S. central bank. “In an environment of economic deterioration, zero percent interest rates, quantitative easing, fiscal stimulus, large trade and current account deficits, ballooning budget deficits and a need to make U.S. assets cheaper and create some inflation…a weaker dollar is a logical conclusion,” said technical strategists at Citigroup. They say the euro’s next move is toward $1.39. The euro, meanwhile, was almost flat against the yen and higher against the dollar. Dealers said the euro could strengthen in the days ahead thanks to players’ recovering risk appetite. Yet any moves could be quite volatile because of the much-awaited ECB policy meeting next week. The European Central Bank looks like it may cut interest rates further next week, if the string of dovish comments shortly before the Governing Council meeting are any guide. Expectations of the ECB’s next move have shifted dramatically over the last week with markets now seeing a 98% chance of an April rate cut after giving it only a 38% chance last Thursday. Data: Industrial new orders exp—5.7% prev –5.2%

Falling Oil Supply Risks a Price Rise
US reveals sweeping regulatory overhaul
The dollar fell against the yen in Asia Friday because Japanese exporters sold the greenback


GBP/USD 1.4394
GBP/EUR 1.0639
EUR/USD 1.3522
GBP/JPY 141.08
GBP/AUD 2.0580
GBP/NZD 2.5042
GBP/ZAR 13.6224
GBP/CHF 1.6243
GBP/CAD 1.7713
GBP/SGD 2.1720
GBP/THB 50.663
GBP/HKD 11.1535

These rates are for indication purposes only.

This information has been supplied by Voltrex. For further information contact:

One Response to “Forex market report 27/03/09”

  1. Andrew says:

    Dear all,

    For future reference please visit Currency Exchange


Leave a Reply