IMS FX Morning Report 13-10-2010

IMS FX MORNING REPORT for Wednesday 13th October 2010

Today's Interbank rates -

POUNDS TO US DOLLARS 1.5857
POUNDS TO EUROS 1.1338
POUNDS TO AUSTRALIAN DOLLARS 1.6029

EUROS TO US DOLLARS 1.3984
EUROS TO POUNDS 0.8819
EUROS TO AUSTRALIAN DOLLARS 1.4139

POUND HEADLINES:

• Sterling fell yesterday against the euro following on
  from comments from a UK policymaker. David Miles commented that '
  Quantitative easing remains a potentially powerful tool and one that we
  might come to use'
• Focus today turns to UK jobless claims and ILO
  unemployment rate release for September. A slightly improved claimant count
  figure is expected but will have to be a great jump in order to lend the
  pound any real support
• Yesterdays data revealed that Consumer Price Inflation is
  at 3.1% for September which is still more than a percentage above the Bank
  of England's target rate of 2%
• Nationwide Consumer Confidence for September has come
  back at 53 versus an expected 59 and 62 in the prior period. UK consumer
  confidence is at an 18 month low

EURO HEADLINES:

• French CPI data comes back lower than expected for
  September at -0.1% missing expectations for 0.2%. The Y/Y figure is 1.6%
  missing expectations of 1.7%
• Eurozone Industrial Production for August M/M comes back
  at 1.0% beating an expected 0.8%. The Y/Y figure is 7.9% beating
  expectations of 7.4%
• Euro dropped slightly yesterday against pound and dollar
  but later recovered its losses supported by comments from a member of the
  ECB which highlighted the difference in policy direction between the Fed,
  BOE and ECB, raising demand for the single currency

US DOLLAR HEADLINES:

• USD came under slight pressure following on from the Feds
  minutes. FOMC stated 'employment rising 'only slowly' but double dip
  recession unlikely. Saw 'only small odds of deflation'. This has heightened
  the argument that the Fed may opt for QE at their next meeting, further
  undermining the dollar
• This week we have further data from the US in the form of
  Producer/ Retail Price Indexes and CPI figures as the dollar remains
  volatile heading toward the end of the week
• The pound lost further ground against the dollar
  yesterday as the prospects for the UK's monetary policy grabbed market
  attention

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