Weekly Market Update 09-03-2011
 

Good Afternoon,

It’s been a relatively quiet start to the week for FX markets.
Data so far: German Factory orders for January rebounded sharply following a steep decline in December.
UK Retail sales for February fell unexpectedly by almost 0.5%, the sharpest decline since April last year. In the housing sector
RICS reported a decrease in the number of surveyors reporting house price declines rather than increases last month although the balance continued to signal declining prices.
Big improvement in the UK’s trade balance which dropped from a deficit of £9.6bn in December to £7.05bn in January.

The Euro is down on the week so far as concerns resurface surrounding the ongoing debt issues. Portugal’s borrowing costs continue to remain at unsustainable levels and it surely is just a matter of time before they have to borrow from their neighbours and the IMF. Moody’s Investors Service downgraded Greece’s government bond ratings two days ago and the debt ratings of Portugal and Greece remain at risk of being cut due to concern about how a European Union rescue fund may affect holders of the two nations’ sovereign bonds.

A local paper in NZ reported that according to one of the banks, the RBNZ would not be able to cut rates this Thursday in response to the latest earthquake as inflation is already running too high.

Biggest movers:

GBPNZD down over 1% - dropped back from a 6-month high above 2.21 (following article on rate cut above)

GBPCAD down over 1% - reached a 7-week low this morning. The Loonie is in high demand after stronger than expected GDP growth figures and a very strong reading from February’s purchasing manager’s index (expected at 51.40, actual 69.3!) last week. Oil over $100 p/b as well as the positive employment report from the States on Friday will have also increased its appeal.

GBPZAR down around 1% Gold prices back up to record highs