| Friday 5th March 2010
Good Morning,
USD
The US jobless claims data was in line with expectations with a decline to 469,000 in the latest week from a revised 498,000 the previous month. The pending home sales data was weaker than expected with a 7.6% monthly decline following a series of robust reports during the second half of 2009 and some housing doubts will persist. The US payroll data will be watched closely on Friday and there is certainly a risk that bad weather conditions will trigger a weaker than expected result. Market expectations have been scaled back over the past few days and this should help protect the dollar from selling pressure unless the data is very weak.
EUR
The Euro failed to extend gains in European trading on Thursday and weakened toward the 1.3650 region against the dollar ahead of the ECB interest rate decision.
The central bank announcement was in line with expectations as interest rates were left on hold at 1.00 percent . The bank continued the gradual removal some of the longer-term liquidity measures which had been introduced during the crisis, but the 7-day and 30-day liquidity auctions will be maintained until at least October which illustrates that the bank will continue to take a cautious stance given the uncertainties. ECB President Trichet also commented that IMF support for Greece would not
be appropriate and these remarks tended to renew unease over the debt situation surrounding Greece. Overall Eurosentiment is liable to remain generally very fragile in the short term.
GBP
Sterling held steady above 1.5050 against the dollar in European trading on Thursday ahead of the Bank of England interest rate decision as the trend for consolidation continued.
The central bank held rates on hold at 0.50 percant following the meeting which was in line with market expectations. There was no expansion of the quantitative easing programme which was left at GBP200bn while the bank did not release a statement. The decision to resist any further easing provided some support for the UK currency and there were gains to near 0.9030 against the Euro. Sterling, however, dipped to lows near 1.50 against the dollar as there was a generally firmer US currency. Underlying confidence in Sterling remained weak as markets continued to fret over government debt levels and the political stresses and it will be difficult to secure a significant improvement in the near term.
Morning Market Rates: (Please note: These are indication prices only, they are not offer rates)
GBP/USD: 1.4986
GBP/EUR: 1.1004
GBP/AUD: 1.6607
GBP/CHF: 1.6121
GBP/ZAR: 11.1469
GBP/JPY: 133.23
USD/JPY: 88.98
USD/ZAR: 7.4121
EUR/USD: 1.3548
EUR/ZAR: 10.0856
GBP/NZD: 2.1680
GBP/CAD: 1.5420
EUR/CHF: 1.4580
GBP/AED: 5.5020
And finally,
Have a great day
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