Rational FX – Daily Market News on 10/12/2010

Yesterday’s Market Movers

Sterling and UK equities showed little change after the Bank of England kept rates on hold as expected on Thursday. The BoE kept interest rates on hold at 0.5 percent and left quantitative easing unchanged at 200 billion pounds.

• The UK yesterday had 2 major pieces of data, firstly coming from the UK trade balance these come in at -£8.529bn which was a slight increase last month’s figure. These figures show the difference between imports and exports a positive number shows trade surplus whilst a lower figure shows trade deficit.
• The Bank of England kept its emergency stimulus program unchanged after recent data suggested the economy may be strong enough to weather the government’s impending spending cuts, undermining the case for more aid. The nine-member Monetary Policy Committee, led by Governor King held its QE program at 200 billion pounds as forecast by many economists. The bank also kept its key benchmark interest rate at a record low of 0.5 percent. Sterling showed little sign of movement after these figures were realised as many people had expected these numbers.
• The main data out from the euro zone yesterday was from credit rating agency Fitch who    downgraded Ireland to BBB+ Thursday, citing the costs of the restructuring of the banking system and the loss of access to affordable funding in the market.
• The ratings agency also said the three-notch downgrade from A+ was spurred on by weaker prospects and greater uncertainty regarding the economy as a result of the intensification of the financial crisis.
• The only piece of data from the United States came in the way of the Initial jobless claims; these numbers came in at 421,000 which saw a drop of 17,000 from the previous month’s 438,000. Initial jobless claims represent the number of workers filing first- time claims for unemployment in the United States.

Market movers December 10th 2010

• Data from the UK today comes in the way of the PPI, is a monthly measurement of the price changes of goods produced by UK manufacturers. Generally speaking, a price hike generates higher retail prices for consumer is a monthly measurement of the price changes of goods produced by UK manufacturers.   A higher reading is normally seen as a positive for sterling whilst a lower number could by seen a negative, these figures came in at 4% the month prior.
• We have no data out from the euro zone today of any real impact, yet we could see dealers squaring up any open positions heading into a weekend.
• The United States see’s data in the way of US trade balance today, these figures came in last month at $-44bn and represent the difference between imports and exports in the US. A higher number is generally since as dollar positive whilst a lower number could see the US dollar trade lower.
• The Michigan Consumer Sentiment Index comes out towards the end of London trade a shows a picture of whether consumers are willing to spend money or not in the US. This figure came out last month at 71.6 a higher reading will normally see the US dollar rise whilst a lower number could see slight negativity.
• Finally out from the United States is the monthly budget statement at 7pm, this is normally summarizes financial actives in the US. A positive statement is normally seen a dollar positive will a negative figure indicates government debt which could see dollar weakness.

We wish you a very nice day.

The RationalFX Team