Market Commentary 26/3/09
Summary:
Sterling struggled yesterday after poor CBI figures. The Confederation of British Industry’s distributive trades survey balance fell to -44 in March from -25 in February. Analysts had expected a smaller deterioration to -35.
The pound was down 0.4 percent against the dollar at 1.4618 mid afternoon after dipping to a session low of 1.4549 after the retail figures. The Euro was up 1.1% at .9269 (1.0789).
In the US, Treasury Secretary Timothy Geithner has defended the dollar as the world reserve currency, a day after China called for it to be replaced. He said the dollar was the world’s dominant reserve currency and was likely to remain for a long time. On Tuesday, China’s central bank called for a new reserve currency run by the International Monetary Fund. China, which holds the most currency reserves in the world worth some $2tn (£1.37tn), has often complained about the dollar’s volatility. Recently, China has shown concerns that the US’s steps to rescue its economy could weaken the dollar’s value.
Gordon Brown has urged world leaders to “take action” in order to reform the global financial system when they meet at next week’s G20 summit at ExCel in London’s Docklands. He feels that between the leaders they must reach an agreement whereby strong growth and recovery along with a rejuvenated job market will be ensured.
“We will have to take action in London to make sure that the banking system is reformed, to ensure ourselves that our financial institutions can come to the aid of the poorest countries and to make sure that we do what is necessary to ensure that there is strong growth and recovery and particularly jobs in the world economy as a result of the actions that we take,”
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SPOT Prices |
EUR € / GBP £ |
EUR € / USD $ |
GBP £ / USD $ |
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Start of Year |
0.8739 |
1.2903 |
1.4771 |
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Start of Month |
0.8848 |
1.2587 |
1.4223 |
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Current |
0.9309 |
1.3567 |
1.4569 |
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Market Sentiment |
EUR € / GBP £ |
EUR € / USD $ |
GBP £ / USD $ |
|
Today |
Up |
Up |
Up |
|
This week |
Up |
Up |
Down |
|
This month |
Up |
Flat |
Down |
Yesterdays data:
German IFO – Fell to record lows of 82.1 in March suggesting the economy in Germany has not yet reached a turning point.
US Durable Goods US Durable Goods (measures the cost of orders received by manufacturers for durable goods, which means goods planned to last for three years or more, such as motor vehicles and appliances) came out at 3.4% against a forecast of -2.2%, showing an unexpected increase in orders which was extremely positive.
US New Home Sales also rose by 337K against a forecast of 300K, showing the US housing market may have started to stabilise a little.
Today’s data:
07.00am – German Gfk Consumer Confidence has fallen to 2.4 from 2.6 in February.
09.30am – UK Retail Sales forecast at 2.5% previous 3.6%.
12.30pm – US GDP (shows the monetary value of all the goods, services and structures produced within a country in a given period of time.) The annualised figure is expected to come out at -6.6% against a previous of -0.5%.
fxjunkies 