30th March 2011
Good morning. Yesterday data showing the UK economy shrank slightly less than first thought in the final quarter of 2010 had little impact on the markets, but Sterling has made slight gains this morning. At 09:00am this morning stand as follows:
- GBP/EUR 1.1377
- GBP/USD 1.6036
- GBP/AUD 1.5542
- GBP/NZD 2.1089
- GBP/CAD 1.5589
- GBP/CHF 1.4782
- GBP/ZAR 10.937
- GBP/JPY 132.98
- GBP/NOK 8.963
- GBP/HUF 303.28
- EUR/USD 1.4090
Pound unchanged on GDP figures
The Office for National Statistics yesterday revised 4th quarter GDP growth upwards to -0.5 % on the quarter from its most recent previous estimate of -0.6 percent, though the new figure is still the biggest decline since the second quarter of 2009.
Despite the GDP figures not being quite as bad as expected, analysts said the preliminary estimate for the first quarter of this year, due at the end of April, would be more significant.
Most movements in Sterling exchange rates at the moment continue to be driven by interest rate speculation. Hawkish comments from European Central Bank President Jean-Claude Trichet on Monday added to views that euro zone interest rates would rise as soon as April, whereas UK rates are not expected to go up until later in the year, with the outlook for the UK economy uncertain.
Higher rates mean a higher return for investors, so when rates are rumoured to go up usually the currency concerned gains strength.
More EU data today with Consumer and Economic confidence figures released at 10am. Later in the day we have US mortgage applications and a speech by the FED. At midnight Gfk release a measure of consumer confidence that is expected to be low.
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