Finotec News Archive - March 10 2010

Sterling slips below $1.5000 on trade balance data and credit concerns

Tammy Wally
10 March 2010

Add to bookmark:

Print this article

Subscribe to RSS

The British pound tumbled to below $1.50 on Tuesday on weak economic data and as credit ratings firms warned on Britain's sovereign rating and those of its commercial banks. Political uncertainty about a hung parliament as the latest opinion polls showed a close race in key marginal seats also hurt the pound, as well as a general pullback in riskier assets. The pound was also hit after Fitch Ratings said Britain's sovereign credit profile had deteriorated, and urgency for fiscal adjustment was greatest for the UK, Spain and France among the larger AAA sovereigns. But it also said Britain was still within tolerance of its top-notch rating. "Sterling has been hit by comments by Fitch; the trade data showing weaker exports; and the earlier data on the housing market," said Hans Redeker, global head of fx strategy at BNP Paribas. "Ultimately, the move on sterling is to the downside." The GBP/USD is currently trading at $1.4990 as of 20:21pm, GMT, with a bullish trend.

The euro dropped versus the yen after Fitch Ratings Director Christopher Pryce said at a conference in London that while the outlook for Greece is “probably OK” in the short term, prospects in the next six to nine months are less certain. There are “clearly already the beginnings of dissent within the Greek cabinet,” Pryce said. The euro erased its loss versus the yen after the European Commission said in a draft report Greece is on course to meet its budget goals in 2010. The report will be discussed by EU finance ministers at a regular meeting in Brussels next week. “Over the past few days there was optimism that the austerity packages announced would lead to underlying improvement,” said Todd Elmer, global market currency strategist at Citigroup Inc. in New York. “‘Concerns over solvency in euro area will linger, and that will weigh on the euro.” The EUR/USD is currently trading at $1.3600 as of 20:43pm, GMT, with a bearish trend.

Canada’s dollar traded near its strongest level in over seven weeks as gains in stocks and persistent strength in commodity prices drove investors into currencies tied to economic growth. “Oil prices are not far off from cycle highs,” said David Watt, senior currency strategist in Toronto at Royal Bank of Canada, the nation’s biggest lender. “Ditto for the S&P 500. There is thus a clear triangulation that puts commodity currencies in a positive light, the Canadian dollar included.” Crude oil earlier declined as much as 2.1 percent to $80.16 a barrel before trading at $81.40. The Standard & Poor’s 500 Index advanced 0.3 percent. The USD/CAD is currently trading at 1.0262 as of 21:13pm, GMT, with a bullish trend.

Finotec Analysis Team
10 March 2010

The market review and analysis content on this site, including news, quotes, data and other information, is provided for your personal information only, and is not intended as a recommendation for trading purposes. Content on this site does not provide any form of advice (investment, tax, legal) amounting to investment advice, or make any recommendations regarding particular financial instruments, investments or products. Finotec does not provide investment advice or recommendations to buy or sell securities.

Today's Economic Events

Time	Event	Currency/Country	Period	Previous	Forecast	Significance	Actual
10-03-2010 23:50	Nominal GDP (Q-o-Q)	Japan	Quarterly	-0.9
10-03-2010 23:50	GDP Deflator (Y-o-Y)	Japan	Yearly	-0.5
10-03-2010 23:50	GDP (Y-o-Y)	Japan	Yearly	1.3
10-03-2010 23:50	GDP (Q-o-Q)	Japan	Quarterly	0.3
10-03-2010 21:45	Food Prices (M-o-M)	New Zealand	Monthly	2.1
10-03-2010 21:45	Food Prices (Y-o-Y)	New Zealand	Yearly	2.2
10-03-2010 20:00	Interest Rate Decision	New Zealand		2.50	2.50		2.50
10-03-2010 19:00	Monthly Budget Statement	USD/United States		-193.9	-222.0		-220.9
10-03-2010 18:00	EIA Crude Oil Price	USD/United States		79.37
10-03-2010 15:30	EIA Crude Oil Inventory (Barrels)	United States		341.6
10-03-2010 15:00	NIESR GDP Estimate	UK		0.4
10-03-2010 15:00	Wholesale Sales (M-o-M)	United States	Monthly	0.8
10-03-2010 15:00	Inventories (M-o-M)	United States	Monthly	-1.0	0.2		-0.2
10-03-2010 12:00	MBA Mortgage Applications	United States		14.6
10-03-2010 09:30	Industrial Production (M-o-M)	UK	Monthly	0.5	0.3		-0.4
10-03-2010 09:30	Industrial Production (Y-o-Y)	UK	Yearly	-3.7	-0.8		-1.5
10-03-2010 09:30	Manufacturing Production (M-o-M)	UK	Monthly	0.9	0.2		-0.9
10-03-2010 09:30	Manufacturing Production (Y-o-Y)	UK	Yearly	-1.9	1.4		0.2
10-03-2010 07:00	Exports	€/Germany		72.3
10-03-2010 07:00	Imports	€/Germany		55.6
10-03-2010 07:00	Trade Balance	€/Germany		16.6	14.5		8.7
10-03-2010 07:00	CPI (M-o-M)	Germany	Monthly	-0.6	0.2		0.4
10-03-2010 07:00	CPI (Y-o-Y)	Germany	Yearly	0.8	0.4		0.6
10-03-2010 07:00	CPI - EU Harmonised (M-o-M)	Germany	Monthly	-0.6	0.2		0.4
10-03-2010 07:00	CPI - EU Harmonised (Y-o-Y)	Germany	Yearly	0.8
10-03-2010 07:00	Current Account Balance - BoP	€/Germany		19.9	15.0		3.6
10-03-2010 04:00	OPEC Oil Market Report	United States
10-03-2010 01:30	Home Loans	Australia		-5.5	2.0
10-03-2010 01:30	Investment Lending	Australia		1.9
10-03-2010 01:30	Value of Loans (M-o-M)	Australia	Monthly	-4.7
10-03-2010 01:00	CB Coincidence Index	Japan		0.5			1.1
10-03-2010 01:00	CB Leading Index	Japan		1.6			1.8