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Weekly Market Update 15-03-2012

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Range of the week: 1.1870 – 1.2055
Variance of the week on £10k= €185

Despite a quieter week on the data points from Europe and the U.K. volatility has finally picked up even if the pair continues to cling onto 1.20 level like Rick Astley tried to cling onto his pop career (thank goodness he failed)! The Ratings agency Fitch downgraded the U.K.s outlook warning that any veering from the deficit reduction plan has a 50% chance of an actual downgrade

Germany’s ZEW analysts survey continued to improve with economic expectations index rising the highest level since June 2010.
Industrial production in the EZ increased in Jan but by less than expected. it dropped sharply in Dec and may have only managed an increase thanks to Germany’s contribution.
Inflation in the EZ was slightly higher than forecast so expectations for another rate cut by the ECB this yr could be misplaced

UK housing market is stabilising/improving depending on what you use to measure it but the number of Royal Institute of Chartered Surveyors reporting house price decreases reduced last month.
The trade deficit was slightly lower than expected, a particular positive was the increase in the export of goods to non-EU countries
Unemployment is back on the increase which is partly to be expected as the government seeks to reduce the public sector headcount as part of austerity measures to reduce the deficit.

Range of the week: 1.5600 – 1.5750
Variance of the week on £10k= $150

Improving US outlook gives Dollar the edge as Sterling hits a 7-week low.
Following another very positive increase in new jobs created (16th consecutive month of gains) the Federal Reserve upped their current assessment of the economy and made no reference to additional stimulus which caused the Dollar to strengthen. We expect that trend to continue as the UK economy looks set for another stuttering year of limited growth.

Range of the week: 1.4820 – 1.5020
Variance of the week on £10k= A$200

Breaches 1.50 for the first time in 2 months!
Recent data from Australia is indicating a slowdown with consumer sentiment down and unemployment expectations up. Whilst this may weaken the Dollar slightly, unless we see a significant slowdown and interest rates slashed then the Oz Dollar will continue to remain a lot more attractive than the Pound.

Range of the week: 1.9000 – 1.9420
Variance of the week: on £10k= NZ$420

No major data. One of a few central banks which are forecasted to hike interest rates during 2012 (at the moment!) helping support the Kiwi.

Range of the week: 11.76 – 12.11
Variance of the week: on £10k= ZAR3,500

No major data

Range of the week: 1.5755 – 1.5941
Variance of the week: on £10k= 186CAD

No major news or data for the week so far
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