Currency Markets discussed on CNBC

Today for something a little different, we’ll watch our Director of Foreign Exchange discuss the currency markets on CNBC. First as usual, a quick look at where rates stand…

GBP/EUR 1.1385
GBP/USD 1.6478
GBP/AUD 1.9224
GBP/NZD 2.3741
GBP/CAD 1.7821
GBP/ZAR 12.419
GBP/JPY 152.41

The pound fell away in trading yesterday, with markets reacting poorly to the forecast UK budget deficit, as already discussed here on the blog. Alastair Darling said that spending would need to be cut, but will actually be spending more in the near term. This attempt to spend the UK out of the financial mess we’re is is alarming analysts, as it stores up further problems and is keeping Sterling fragile.

We now wait for tomorrows BoE announcement to see which way Sterling will move.

Watch our Director of Foreign Exchange :

UK Jobs
The UK jobs market is starting to show signs of recovery, according to a survey of recruitment agencies. The research, produced by Markit Economics, finds “marginal increases” in both permanent and temporary appointments in August. For permanent staff, this is the first increase since early 2007.

“This is first time we have seen really positive news for the UK jobs market in 17 months,” said Bernard Brown from KPMG, co-sponsor of the survey. Despite this, it’s still expected unemployment will rise above 3 million, which will put further pressure on the pound.

Todays Data
We have already had German Consumer Price Index, that came in exactly as expected.

At 09:30am we have Trade Balance Data, which is a balance between exports and imports of goods A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the GBP.

10:30am sees the UK Shop Price Index which measures price changes in the popular retail outlets in the UK. The changes in the SPI are widely followed as an indicator for inflationary pressures.

Elsewhere we have Canadian Housing Starts, an Interest Rate Decision from New Zealand where we expect rates to be held at 2.5%.

At the end of the day, we have the GDP estimate report that comes out a month before the official announce. The report is highly reliable and would influence the UK monetary policy.

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