Finotec News Archive - January 26 2010
Sterling rises as investors eye the UK’s GDP figures and expected growth
The GBP/USD is currently trading at $1.6223 as of 7:08am, GMT, with a bullish trendTammy Wally 
26 January 2010
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| EUR/USD | USD/JPY | GBP/USD | USD/CHF | |
|---|---|---|---|---|
Resistance | 1.4295(M) 1.4264(M) 1.4218(M) | 91.88(M) 90.90(M) 90.79(M) | 1.6313(M) 1.6307(M) 1.6285(M) | 1.0600(M) 1.0563(M) 1.0497(M) |
Support | 1.4065(M) 1.4030(M) 1.4030(M) | 89.30(M) 88.83(M) 88.58(M) | 1.6191(M) 1.6077(M) 1.5900(M) | 1.0421(M) 1.0368(M) 1.0358(M) |
The British pound rose against the greenback and the euro on Monday, recovering some of its recent losses as investors looked ahead to UK gross domestic product data due on Tuesday. The GDP figures are expected to show the economy returned to growth in the fourth quarter, with the consensus of analysts polled by Reuters predicting a 0.4 percent quarterly rise. However, market participants remained wary about the possibility of a weaker than expected reading, particularly after figures on Friday showed retail sales rose much less than forecast in December.
Sterling gained in line with rises in perceived higher risk currencies after reports Federal Reserve Chairman Ben Bernanke was closer to being confirmed for a second term helped risk appetite. "The data backdrop is important for sterling as the retail sales data was surprisingly weak and raises the risk of GDP numbers coming in on the soft side," said Rabobank strategist Jeremy Stretch. The GBP/USD is currently trading at $1.6230 as of 7:08am, GMT, with a bullish trend.
The dollar and the yen rose against the euro, reversing earlier losses, amid speculation China will take further steps to cool its economic growth, curbing demand for higher yielding assets. China’s central bank has driven bill yields higher to reduce funds in the banking system on concern record loan growth will fan inflation and lead to an inflated property market. Chinese banks have suspended new lending since Jan. 19 across the country, Dong Tao, a Hong Kong-based economist at Credit Suisse Group AG, wrote in a note to clients. The yen typically strengthens in times of financial turmoil as Japan’s trade surplus means the nation does not have to rely on overseas lenders. The dollar benefits as the world’s main reserve currency. The USD/JPY is currently trading at 90.20 as of 7:28am, GMT, with a bearish trend.
European Central Bank governing council member Ewald Nowotny said the bank will scale back its emergency measures “very carefully” to ensure the exit will not create new distortions in financial markets, Financial Times Deutschland reported, citing an interview. “We have a clear aim to avoid any bottlenecks,” he is cited as saying. Nowotny also said economic growth is not strong enough to bring down the unemployment rate in the euro area and that he said he sees “no risk” that core inflation will drop “significantly further,” according to the newspaper. Asked about market expectations that the U.S. Federal Reserve will raise interest rates before the ECB, he said there is “no law” that states the ECB can’t act before the Fed, FTD said. The EUR/USD is currently trading at $1.4080 as of 7:45am, GMT, with a bullish trend.
Finotec Analysis Team
26 January 2010
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Time  |
Event |
Currency/Country
|
Period | Previous | Forecast |
Significance
|
Actual | |
|---|---|---|---|---|---|---|---|---|
| 26-01-2010 23:50 | Merchandise Trade Balance | JPY/Japan | 373.9 | 610.0 |  | 545.3 | ||
| 26-01-2010 23:50 | Merchandise Trade Exports (Y-o-Y) | Japan | Yearly | -6.2 | | |||
| 26-01-2010 23:50 | Merchandise Trade Imports (Y-o-Y) | Japan | Yearly | -16.8 | -10.7 | | ||
| 26-01-2010 22:30 | Westpac Leading Index (M-o-M) | Australia | Monthly | 6.7 |  | |||
| 26-01-2010 22:00 | ABC News Consumer Confidence Index | United States | -49 | -45 | | -48 | ||
| 26-01-2010 15:00 | Richmond Fed Manufacturing Index | United States | -4 | 0 | | -2 | ||
| 26-01-2010 15:00 | Consumer Confidence Index | United States | 53.6 | 53.5 |  | 55.9 | ||
| 26-01-2010 15:00 | House Price Index (M-o-M) | United States | Monthly | 0.4 | 0.5 | | 0.7 | |
| 26-01-2010 15:00 | FOMC Meeting | United States | | |||||
| 26-01-2010 14:00 | S&P/Case-Shiller Composite-20 (Y-o-Y) | United States | Yearly | -7.3 | -5.0 | | -5.3 | |
| 26-01-2010 14:00 | S&P/Case-Shiller Home Price Index | United States | 146.58 | 146.80 | | 146.28 | ||
| 26-01-2010 12:30 | Trimmed Mean (Y-o-Y) | Australia | Yearly | 3.2 | | |||
| 26-01-2010 09:30 | GDP (Q-o-Q) | UK | Quarterly | -0.2 | 0.4 | | 0.1 | |
| 26-01-2010 09:30 | GDP (Y-o-Y) | UK | Yearly | -5.1 | -2.9 | | -3.2 | |
| 26-01-2010 09:30 | BBA Loans for House Purchase | UK | 45.0 | 45.3 | | 45.9 | ||
| 26-01-2010 09:00 | Capital Account Balance - BoP | €/Eurozone | 0.3 | | ||||
| 26-01-2010 09:00 | Current Account Balance - BoP | €/Eurozone | -4.6 | -2.8 | | 0.1 | ||
| 26-01-2010 09:00 | Germany IFO - Business Climate | Germany | 94.7 | 95.2 | | 95.8 | ||
| 26-01-2010 09:00 | Germany IFO - Current Assessment | Germany | 90.5 | 91.3 | | 91.2 | ||
| 26-01-2010 09:00 | Germany IFO - Expectations | Germany | 99.1 | 99.1 | | 100.6 | ||
| 26-01-2010 07:00 | UBS Consumption Indicator | Switzerland | 1.28 | | ||||
| 26-01-2010 07:00 | Import Price Index (M-o-M) | Germany | Monthly | 0.4 | 0.1 | | 0.5 | |
| 26-01-2010 07:00 | Import Price Index (Y-o-Y) | Germany | Yearly | -5 | -1.5 | | -8.6 | |
| 26-01-2010 02:00 | Credit Card Spending (Y-o-Y) | New Zealand | Yearly | 1.6 | |