IFX Market Report for 17/04/2012

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    GBPEUR yesterday traded in a narrow range opening the day at 1.2159, reaching a high of 1.2176 before closing the day at the low 1.2135. This closing rate is significant as the level needed for further upside trends is a close above 1.2150.

    Sterling advanced for a second day versus the Euro after an industry report showed asking prices for UK homes continue to rise, adding to signs Britain’s economy will outperform Europe’s.
    GBPUSD saw a gradual rise through the day, opening at 1.5828 and closing the day at its high of 1.5888. The support and resistance target levels to break at close still remain at 1.5800 and 1.6065 respectively. The currency pair is trading in a range and this is expected to continue until tomorrows MPC meeting minutes are released.

    Data released this morning shows that UK CPI YoY rose to 3.5% as expected, the first monthly rise since September last year. This reduces the likelihood of further QE in the near term and could mean the Bank of England may have to tighten monetary policy in future meetings.EURUSD dropped to a monthly low of 1.2994 yesterday, but began retracing during the afternoon to close the session at 1.3080. This morning the pair is trading back above 1.31. Analysts are looking for a close below 1.3000 to see the downward momentum gather pace.

    Federal Reserve officials are grappling with how they might eventually exit from their plan to keep interest rates low through late 2014 without jolting markets.

    Fed member Bullard stated yesterday that the US should hold monetary policy steady when it meets next week and continue to evaluate its options for the future.

    US Core Retail Sales were released at 0.8%, after forecasts of just 0.3%. This is up on February and 6.1% higher than a year ago.

    French President Nicolas Sarkozy Tuesday said in a radio interview yesterday that the weaker euro is good news as it boosts the competitiveness of European exporters.

    Spanish 10-year bond yields jumped to 6.16% the highest level since December 1st.

    Spain will sell 12 and 18 month bills today, followed by auctions of debt due in October 2014 and January 2022 on April 19th.

    China’s yuan tumbled against the dollar as the central bank doubled the daily trading band, in one session USDCNY weakened 0.2% to 6.315.

    AUD declined against 15 of its 16 major peers after minutes of the Reserve Bank of Australia’s last meeting signalled that the central bank is ready to cut interest rates if inflation eases. The minutes reaffirmed that the next rate reduction hinges on an April 24 report on first-quarter inflation. GBPAUD moved from 1.5280 at 3pm yesterday and is currently

    Daniel Fountain / 16.04.2012

    Editor, Hotel Designs


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