Important day for GBP/EUR rates

Good Morning. The pound rose against most currencies yesterday, after a period of decline. This morning at 08:30am rates are as follows:

Sterling rose against the USD and EUR yesterday, extending gains made the previous day as possible fallout from Dubai's debt-related problems eased as it looks like UK banks are not as exposed to the debt problems there as first thought. Risk assets also got a boost after data showed U.S. private sector employers shed fewer jobs in November from October, marking the eighth straight monthly decline in private-sector job losses.

The pound also rose against a broadly weaker yen, traders said. The yen fell in the wake of the Bank of Japan's emergency policy meeting on Tuesday where it said it provide more liquidity through new fixed 3-month funding.

Eurozone
Today is an important day for GBP/EUR in particular, as we have lots of important data releases from the Eurozone. We have the following releases that will likely affect exchange rates:

EU - Gross Domestic Product. This is is a measure of the total value of all goods and services produced by the Eurozone. The GDP is considered as a broad measure of the Eurozone economic activity and health. A rising trend has a positive effect on the EUR, while a falling trend is seen as negative. We expect this to show a quarterly rise of 0.4% and an annual decline of -4.1%.

We also have Retail Sales for the EU. This is is a measure of changes in sales of the German retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales.The changes are widely followed as an indicator of consumer spending. We expect a monthly rise of 0.2% and a decline year on year of -2.4%.

An interest rate decision is also due for the EU. We expect rates to be left on hold for this month at 1%. A little after the announcement, there is a speech by the ECB. This will be more important than the decision itself.

They give a press conference as to how the ECB observes the current European economy and the value of EUR. His comments may determine a short-term positive or negative trend. If the speech seems to indicate rates may rise in the coming months, expect the Euro to strengthen and GBP/EUR rates to fall.

If the releases from Europe are good today, then we will probably see the recent rise in rates come to an end. If however the releases are not as good as expected, then the Euro may weaken. Either way, we'll probably see some volatility for exchange rates today.

To take advantage of any spikes in the market, you may wish to consider placing a Limit/Stop Loss order. A Limit Order is an order to secure currency at a specific price that may not be currently available. This type of contract is particularly useful when the markets are moving in a positive direction for you.This is one of the two most common types of orders, the other being a Stop Loss Order.

A Stop Loss Order is used when the market is moving in a negative direction for your currency. An order is placed on file with your broker to help ease the stress of adverse market movements.A stop loss order instructs your broker to buy when the currency hits a certain point. The purpose of the stop loss is obvious – you want to prevent any further movement before the currency falls any further.

To find out more about these type of contracts, and if they are suitable for you, contact us today.

USA
We have lots from the US today also, including various measures of unemployment. If figures are good, then we will probably see the dollar weaken slightly as investors take good news as a sign of economic recovery, and diversify their investments to riskier currencies.

When you get in touch, ensure you mention you heard about foremost currency group through our Blog. Simply quote 'Blog'

Open a free Trading Facility

Open an online Trading Account

Email Me

Foremost Currency Group