IFX Market Report for 27/04/2012

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    GBPEUR traded at a high of 1.2284 and a low of 1.2218. With no UK data out today we can expect a similar trading range today.GBPUSD hit a low of 1.6154 overnight, having hit an 8 month high of 1.6208 during yesterday morning. Price continues to hover above the key level at 1.6170 this morning, the trading range for the coming weeks is likely to remain between key support at 1.5880 and key resistance at 1.6300.

    The UK Financial Services Authority Chairman Adair Turner will speak today and he is expected to suggest that the euro zone’s two bailout funds should be used to recapitalize the currency union’s stricken banks.

    The UK public’s expectations for inflation in the coming year rose in April, presenting the Bank of England with an awkward policy dilemma for the recession-hit economy.


    Credit rating agency Standard and Poor’s downgraded Spanish credit ratings by two notches yesterday, saying that it expects further deterioration of the country’s public finances amid economic contraction and the need to support banks.

    Spanish PM Mariano Rajoy commented yesterday that the country’s ability to fund itself is at risk and that budget cuts are necessary due to an unmanageable deficit, also have not helped matters.

    Eurozone economic confidence declined notably in April, wiping out the gains logged in the first quarter. The data fell more than expected to 92.8 from a revised 94.5 in March.

    The weaker than expected Eurozone economic confidence report helped the US dollar to rebound from a 3-week low versus the Euro posting a low of 1.3202. Although general feeling is of Euro strength now it has broken key resistance at 1.3236, the trading range for the coming sessions is expected to stay between key support at 1.3005 and key resistance at 1.3385.

    Pending home sales in the US rose by much more than anticipated in the month of March. The index rose by 4.1% in March when expectations were for a modest 1.0%.

    New claims for US unemployment benefits dipped slightly in the third week in April coming in at a seasonally adjusted level of 388,000.

    Overnight, the Bank of Japan decided to add further monetary stimulus to the economy through enhanced purchases of the government bonds, stepping up its efforts to boost economic growth and fight deflation. The Central Bank’s policy board unanimously voted to increase the total size of its asset purchase program by JPY 5 trillion. GBPJPY jumped from 130.17 to 131.72 within minutes of the news being released and has since steadily traded back down towards 130, the pair is currently residing at 130.51.

    The Swiss Institute for Business Cycle Research (KOF) leading indicator for April was released this morning at 0.40 having been expected at 0.26. After the data, the Swiss franc weakened against most major currencies, GBPCHF moved from 1.4695 up to 1.4772 after the news.

    Daniel Fountain / 26.04.2012

    Editor, Hotel Designs


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