Forex market report 31/03/09

  • Euro weakens on ECB members comments & weak economic data
  • Sterling makes gains against majors on positive UK data
  • Equity markets make losses over 3% but dollar still weakens
  • US Government moves to overhaul GM, Chrysler dragging the dollar down
  • Ireland’s economy losses coveted AAA rating

US Dollar: The dollar had a mixed day yesterday, posting losses against the pound but still managed to continue its bull run on the euro. The greenback started to slide against sterling after better than expected economic data from the UK helped push up the pound across the board, as the dollar lost nearly one and a half cents on the pound to trade at an intraday low of $1.4258. The loss was confounded as the US President made a speech on the state of its auto industry. A warning that they cant depend on an unending stream of taxpayers dollars came from President Barack Obama. He gave GM 60 days and Chrysler 30 days to get their house in order, and did also say the best chance for success for either company may be bankruptcy. This saw the dollar continue to weaken in afternoon trade. The greenback did manage to continue to make some gains on the euro, as we saw the dollar hit a near two week high of $1.3112. This was helped by weak data from the E/zone and a potential rate cut by the ECB this week. The dramatic fall in equity markets did nothing to help the fall of the buck. Data 14.00: Consumer Confidence expected 28 from 25. Speakers 13.00: fed’s Stern.

Sterling had a fairly good day on Monday, managing to stem the losses against the dollar, and take some losses back, combined with an impressive run against the euro. The day started positive for the pound, with mortgage approvals posting a rise to their highest level in nine months in February. This alongside the noose of the dilemma facing the US auto car industry saw cable rally an impressive one and a half cents to hit an intraday high of $1.4276. This has continued this morning as we have seen data in the form of UK consumer confidence unexpectedly rise for the second straight month in March, pushing cable over the $1.43 level. Sterling’s performance against the euro also looked bullish, as we saw the pound rally nearly a cent to trade over the 1.08 level. This was helped by dovish comments in the eurozone on its economy and weak economic data in the form of business and consumer confidence in the 16 nations that use the euro. No data. UK Hosts the G20 summit starting tomorrow, with world leaders beginning to arrive today.

The euro was under pressure from all sides yesterday, as a wrath of weak economic data and dovish comments from ECB members saw the single currency lose ground on its major rivals. The euro was still weakening against the dollar until the story broke regarding the US auto industry story, when the euro started to make back some of those losses. The stem was not halted against the pound however, as better than expected data from the UK helped boost sterling against the euro, with EUR/GBP hitting a two week low of 0.9240. The data from yesterday was not good reading, with business and consumer confidence in the 16 nations that use the euro weakening further to reach a record low in March. Comments from European Central Bank Governing Council member Axel Weber didn’t help the euro, stating Germany will not see a recovery in its economy until 2010. This combined with a potential interest rate cut by the ECB this Thursday are weighing heavily on the single unit. Data at 09.00: E/Zone CPI Estimate YoY expected 0.9% from 1.2%.

Japan’s jobless rate hit the worst level in more than three years, data released this morning stated. This has weakened the Japanese currency against its rivals, with the dollar and sterling posting gains.
Ireland was stripped of its AAA credit rating and downgraded to AAA+ by S + P, while being warned that it could drop further if Dublin fails to get its public finances under control. This also hurt the strength of the euro.


GBP/USD 1.4270
GBP/EUR 1.0785
EUR/USD 1.3245
GBP/JPY 140.10
GBP/AUD 2.0740
GBP/NZD 2.5054
GBP/ZAR 13.709
GBP/CHF 1.6322
GBP/CAD 1.7874
GBP/SGD 2.1674
GBP/THB 50.49
GBP/HKD 11.056
These rates are for indication purposes only.

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One Response to “Forex market report 31/03/09”

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