Today's Interbank rates -
POUNDS TO US DOLLARS 1.6120
POUNDS TO EUROS 1.1842
POUNDS TO AUSTRALIAN DOLLARS 1.5844
EUROS TO US DOLLARS 1.3609
EUROS TO POUNDS 0.8442
EUROS TO AUSTRALIAN DOLLARS 1.3376
POUND HEADLINES:
- The BRC sales data overnight provided another strong January indicator to encourage the UK hawks and GBP bulls, but it is worth noting that after last February's recovery from snow four out of the next five months showed decline since the PMI.
- Cautious buyers and sellers failed to give any fresh impetus to the housing market in January. All the key elements of the UK market pointed to a 'sluggish' start to the year, Rics have said.
- It was a fairly quiet day yesterday with the pound closing virtually unchanged against most major currencies ahead of Thursday's Bank of England policy announcement.
- The lack of any concrete proposals from the EU Summit last Friday have helped to undermine sentiment for the Euro, even though there was no major turn in sentiment towards the periphery. The market is for the moment prepared to trust that the ESM proposal at the end of March will be sufficiently credible to bolster the Euro and prevent a renewed attack on peripheral sovereign debt markets, but there are nevertheless few
looking to open long positions at this level. - While yesterday's 3.45% drop in December German factory orders was much worse than expected, economists attach little significance to this report for today's German production data. The fall in orders follows an exceptionally strong reading the previous month and does nothing to change the underlying view that manufacturing conditions continue to recover.
- Sterling briefly touched a level above 1.19 yesterday following a disappointing reading of factory based orders in Germany, which gave credence to the view that the ECB is unlikely to be shifting policy anytime soon.
- It was relatively quiet day yesterday for the pound/dollar following on from Friday's US non-farms payrolls data. Although the report was a sign of improving conditions in the US labour market, rising levels of risk appetite combined with reduced tensions in Egypt is applying some downward pressure on safer currencies.
- Fed Reserve Chairman Ben Bernanke is due to testify tomorrow at a hearing of the House Budget Committee.
- Today we have the NFIB Small Business Optimism Index released in the US this afternoon although it is not expected this will cause much market excitement.
Kris Charalambides
www.imsfx.co.ukTel: 0207 183 2790
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