IMS FX Morning Report 08-10-2010

IMS FX MORNING REPORT for Friday 8th October 2010

Today's Interbank rates -

POUNDS TO US DOLLARS 1.5871
POUNDS TO EUROS 1.1433
POUNDS TO AUSTRALIAN DOLLARS 1.6303

EUROS TO US DOLLARS 1.3881
EUROS TO POUNDS 0.8746
EUROS TO AUSTRALIAN DOLLARS 1.4260

POUND HEADLINES:

• Yesterday the UK saw a record drop in house prices
  falling by 3.6% in September but we did see better than expected
  manufacturing production data which did briefly push sterling up but was
  unable to sustain its gains to close virtually unchanged against the euro at
  1.1423
• Interest rates were kept on hold at 0.5% for the 19th
  consecutive month. The bank announced it would not be expanding its 200bn QE
  programme. QE is the banks policy of pumping more money into the economy in
  order to increase the supply of money and stimulate growth
• UK PPI output for September M/M comes in at 0.3% beating
  expectations of 0.1%. The Y/Y figure is 4.4% beating expectations of 4.3%
• UK PPI input for September M/M comes in at 0.7% again
  beating expectations of 0.4%. The Y/Y figure is 9.5% beating expectations of
  8.6%

EURO HEADLINES:

• Euro hit a high of above 1.40 yesterday against the
  dollar, the highest since January but was unable to sustain this level and
  closed the day just above 1.39
• ECB interest rates were left on hold yesterday at 1.0%
  which again was no real surprise. ECB president Trichet said 'ECB policy
  makers in exactly the same mood as a month ago', didn't change assessment at
  all
• German imports and exports both come back this morning
  weaker than expected for August

US DOLLAR HEADLINES:

• Today we have Non Farm Payrolls data from the US. A surge
  in new non-farm payrolls suggests rising employment and potential inflation
  measures, which the Fed often counters with rate increases. On the other
  hand, a consistent decline suggests a slowing economy, which makes a decline
  in rates more likely
• Sterling rose above 1.60 for the fist time since February
  on the back of positive UK factory output but gains was short lived and
  closed just above 1.59
• Next week we have a host of data from the US in the form
  CPI, PPI and advanced retail sales

If you need to buy, sell or make an international payment today then please
call me for a free quote.

Kris Charalambides

FX Broker

kris@imsfx.co.uk

www.imsfx.co.uk

Tel: 0207 183 2790