Excel Currencies Foreign Exchange (FX) Rates & News Blog by Ashley Ingle

(Please note these rates were as of 09:30am (GMT) this morning, rates do fluctuate every 2 – 3 seconds, so please call us on 01322 221121 for a live rate)

If you need any other exchange rate, please reply.

Main News Daily Update

There were warnings from two ratings agency raised the spectre of downgrades for British banks. Financial markets appear to have paused for breath after the sizeable gains in seen in stock markets last week. Today’s data calendar features January industrial production data in both the UK and France. For the UK, Lloyds look for a month-on-month increase of +0.3% as cold weather conditions boosted energy demand. For the underlying manufacturing component, they anticipate a more modest rise of 0.1% month-on-month, following December’s robust +0.9% outturn. UK Industrial Production is set to fall 0.8 percent in the year to January, the smallest decline in nearly two years. However, yesterday’s unexpected 4.4 percent drop in exports – the largest in over three years – bodes ill for manufacturing going forward, hinting that lackluster demand will keep output subdued even as the government makes a push to make overseas sales the centre-piece of its strategy to build a firm recovery in Europe’s third-largest economy. That said, number of leading output indicators remain well-supported, with a gauge of production expectations from the Engineering Employers Federation turning positive for the first time since 2008 last month while Manufacturing PMI held at the highest in at least three years over the same period. Rumours suggest that heavy snowfall created logjams at ports in January, which may resolve the disconnect between trade and these leading figures, so traders will likely need to wait for further evidence before making any firm conclusions about the trajectory of the UK industrial sector. The comments by MPC member Barker this week, her view that the UK economy ‘is still looking fragile’ and that the ‘response to the pound drop is disappointing’ cooled some of the enthusiasm that emerged following last week’s PMI. Recovery sceptics have a point when they argue that the 2.2% gain in BRC Feb retail sales was mainly because of base effects (low sales in Feb-09), and that the RICS house price balance hit a 5-month low. News that the UK government ran a budget deficit of £4.3bn last month has underscored concerns about the UK’s public finances. The fact that the deficit occurred in a month when inflows of tax receipts are at their peak is highly unusual. Indeed, it is the first time January has posted a deficit since the government starting compiling figures on a monthly basis in 1993. The latest deterioration brings the cumulative budget deficit in the current fiscal year to £122bn, compared with £58bn over the same period in FY2008-09. Although a marked deterioration, the Treasury nevertheless remains on course to meet, if not slightly undershoot, its revised full-year public sector net borrowing (PSNB) projection of £178bn made in the Pre-Budget Report. In this regard, the government has been aided by the stronger-than-expected recovery in asset prices (both housing and equities). The magnitude of the deficit, however, has led to calls for the Chancellor to go much further in tightening fiscal policy in the upcoming 2010 Budget. These calls have become more pressing in light of the difficulties some of the peripheral highly-indebted eurozone countries, notably Greece, have faced in recent weeks. Nevertheless, as others have argued, a further aggressive policy tightening at this stage of the economic cycle could imperil the nascent economic recovery. Looking at the Treasury’s 2009 Pre-Budget Report projections for public sector net borrowing and net debt (as a percentage of gdp). As a result of the measures already announced, public sector net borrowing is projected to halve to £81bn over the next five years to 4.4% of GDP. It will be eight years, however, before PSNB is brought broadly back into balance. Clearly, there is some scope for the Chancellor to announce a swifter and more aggressive reduction through additional cuts in public spending and tax increases. Lloyds suspect he will do so, but delay their implementation until next year or beyond. With an eye on placating the credit rating agencies, the Chancellor is likely to announce further measures to rein in the public finances in the upcoming Budget. Various measures have been mooted: an increase in VAT; changes to inheritance tax; further reductions in public spending (most likely through seeking additional efficiency savings); as well as further increases in sin and environmental taxes. So far, two-thirds of the burden of fiscal tightening has fallen on public spending restraint and the other third on tax increases. It is possible that the Chancellor could stick to this mix. Given the fragility of the recovery, however, the bulk of any additional restraint is likely to be focused on the medium to long term. There is already a substantial fiscal tightening scheduled from 2011 onwards. To front-load further measures while the consumer and business sectors remain fragile would risk undermining the economic recovery. Despite GBP depreciating by a sharp 3.3% against the US $ last month, to a 10-month low (1.4783), Lloyds believe the UK pound may have further to fall in the year ahead. They have lowered our end 2010 target for £/$ to 1.44. The UK economic recovery still looks fragile, despite a slightly stronger tone to the recent data to suggest GDP may expand again in Q1. They believe it is too early to rule out further supportive action from the BoE later this year. The risk of a ‘hung parliament’ (minority government) at the upcoming General Election represents another key downside risk, as the related uncertainty could deter investors.

Yesterday, Taxing the provisional confidence behind the situation in Greece, both ECB policy maker Weber and EU head Barroso voiced doubts about the efficacy of a European Monetary Fund. Considering this is essentially the best backup plan authorities have been able to muster since panic struck the region, these remarks suggest this threat to financial stability is subsisting on speculators’ good will alone. In France, Lloyds anticipate a broadly flat reading for industrial production given the pull-back in business surveys. Other scheduled data releases include Japanese Q4 GDP, where they look for a downward revision to a 4% annualised reading from 4.6% in the previous Q4 estimate. German trade data for January, along with final February CPI, are also published. Germany’s Trade Balance surplus is expected to expand to 14.5 billion euro in January as export volumes rise to the highest in 14 months, adding 0.5 percent from the previous month on the lingering effects of over $2 trillion in global stimulus efforts and buoyant Asian demand, particularly from China. Overseas sales may begin to flounder in the months ahead however; indeed, China’s Customs General Administration reported today that imports from Germany fell to the lowest in nine months in February. Separately, the final revision of February’s Consumer Price Index figures is set to confirm the annual pace of inflation slumped to 0.4 percent in February. Efforts by Greece to tackle its burgeoning fiscal deficit have been welcomed, leading the euro to pare back some of its losses recently. Given the sheer extent of bets against the euro, there appears potential for further short-term gains, if traders’ short positions are squeezed. However, the Greek crisis appears far from resolved and, Lloyds believe, still represents a key downside risk for the currency. The EU-16 economic recovery also appears to have stalled, with GDP growth of just 0.1% in Q4 compared with 0.4% in the previous quarter. An uneven recovery and subdued inflation pressures could see the ECB wait until next year before raising interest rates. Lloyds look for the key refinancing rate to be 1.25% at end Q1 2011, rising to 2.25% by end 2011. However, they have revised down our end 2010 €/£ target to 1.14, from 1.18 previously.

The National Federation of Independent Business’ small business sentiment index fell unexpectedly in its February reading. The headline reading matched its lowest reading in seven months and the expectations component that projects conditions over the coming six months hit its worst level since March. Looking at the reports details, there was a notable easing in the pace of job cuts (small business account for a large majority of American jobs); but “poor sales” stood as the top concern, the outlook for demand dropped to a zero reading and investment expectations were similarly mixed. From a market-moving perspective, this data promises little. On the other hand, as a gauge of fundamental health, this indicator has a scope similar to the ISM surveys. With a similar outcome, the IBD/TIPP Economic Optimism poll itself fell to a year low with a March reading of 45.4. In comparison to the economic data, Chicago Fed President Evans’ commentary carried a little more weight. Notably more dovish than some of his colleagues, Evans said he was worried that unemployment may tick higher and he was “wary” of engaging in asset sales too early. Furthermore, he added to his time frame for rate hike in suggesting the benchmark should be held low for “three or four meetings,” though he did echo a belief that interest on reserves would be an effective measure in the near-term. US dollar sentiment remains positive as markets anticipate the US Federal Reserve as the first major western central bank to raise its key policy interest rate. Recent data suggest that the US economy is set to post annualised growth of 2-3% in the first quarter, down from a revised 5.9% pace in Q4. However, indications for the year ahead look promising; with signs that sustained employment growth is likely to return in coming months. This should support both consumer spending and the housing market, providing the basis for raising the Fed funds rate from its record 0-0.25% low within the next 12 months. Lloyds forecast €/$ to decline to 1.27 by end- 2010, falling to 1.23 by end Q1 2011.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Excel Currencies cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. If you wish to unsubscribe / cancel your subscription to this publication please reply to the email.

20 Copperfields Centre, Spital Street, Dartford, Kent, DA1 2DE
Tel: +44 (0) 1322 22 11 21 Free Fax: 0800 048 8805 Int. Fax: +44 (0) 1322 22 11 30
ashley.ingle@excelcurrencies.com

(Please note these rates were as of 09:20am (GMT) this morning, rates do fluctuate every 2 – 3 seconds, so please call us on 01322 221121 for a live rate)

If you need any other exchange rate, please reply.

Main News Daily Update

The UK dominates in what is otherwise a quiet day for economic data. The pound is still tied to larger fundamental concerns that cover the nation’s economic health, burgeoning deficits and excessively easy monetary policy. Such broad-based topics are difficult to adjust short of sweeping policy reform or a dramatic shift in underlying investor sentiment; but consistent economic data can slowly put the outlook back on course or further diminish the currency’s recent recovery. Data released early in Tuesday’s Asian session, would do little to bolster confidence in the sterling. The RICS House Price Balance for February suffered its sharpest decline in 22 months when the annual reading slowed to a 17-percent pace of growth. The UK’s housing market has shown considerable signs of slowing as a short-fall in supply seems to be the primary catalyst for the incredible recovery for the market to this point. The BRC retail sales gauge would also disappoint despite the 2.2 percent annual growth because of the weak level of sales a year ago. Attention turns to the UK external trade figures this morning. In January, the CIPS manufacturing survey reported that UK export orders rose at their highest level since this series began in January 1996, underpinned by a pick-up in world trade and the weakness of sterling. Lloyds expect the combination of a rise in exports and a fall in imports to have reduced the visible trade deficit to £6.8bn in January, from £7.3bn the month before. As with the other January data, however, Lloyds would caution that the underlying picture could be distorted by the disruptions caused by the cold weather. The markets will be watching for a fall in the trade deficit for confirmation that the hoped-for rebalancing in economic activity away from consumer spending towards net exports is resuming. Other things be equal, a reduction in the trade deficit should be positive for sterling as its implies, at the margin, less reliance on foreign capital inflows to fund the UK’s (falling) current account deficit. Focus today will also be on supply. The UK DMO is scheduled to issue £3bn of 4% 2022 gilts.

In Germany, Industrial production increased slightly (+0.6% m/m) despite bad weather conditions in January. Industrial production rose slightly in January (+0.6% m/m after -1% m/m in December 2009). The rise in production in the energy sector (+8.8% m/m after +2.2% m/m in December) only offset partially the slump in the construction sector (-14.3% m/m after -2% m/m). The rebound in the construction sector should underpin activity after the end of the winter. Nevertheless, the pace of increase in industrial production will remain low. the Sentix confidence index revealed investor confidence in current conditions and expectations improved for the current month. Also, German factory activity grew 0.6 percent in January with energy output offsetting construction.  The dominate threat of the past few weeks – the possibility of a Greek default which could in turn undermine confidence in the European Monetary Union and the euro itself – has actually faded in recent days. This morning, discussion about creating a European fund that could be used to rescue any Union member that is at risk of failure has massaged confidence. Yet, to put such an ambitious plan into action and collect the necessary capital will likely take months. A near-term crisis could inevitably render this plan impotent. 

Though the dollar would ultimately finish Monday’s session little changed, the fundamental pressures behind the market were building. Looking at the Dollar Index, the day was a washout with the session ending directly in the middle of the range that has developed over the past month. And, while there was a little more activity amongst the individual major pairings, the close would largely negate any progress made towards a trend or breakout. For the market’s most liquid cross, EURUSD made an early tag of the recently-established 1.37 ceiling on current congestion and quickly retreated to more stable footing. In a similar manner, the controlled GBPUSD bull trend over the past week would be pulled back from its daily high to position the pair once again just above 1.50. The top release is the National Federation of Independent Business’ small business optimism index for March. This indicator has received little coverage until recently; but considering small businesses account for the majority of American jobs and a considerable portion of its economic output; the indicator deserves closer review as investors speculate the nation’s pace of recovery. The official consensus is calling for a 17-month high reading of 90; but the details of the report are where the real value is derived. The outlook for sales, employment and profit are critical to the general outlook.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Excel Currencies cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. If you wish to unsubscribe / cancel your subscription to this publication please reply to the email.

20 Copperfields Centre, Spital Street, Dartford, Kent, DA1 2DE
Tel: +44 (0) 1322 22 11 21 Free Fax: 0800 048 8805 Int. Fax: +44 (0) 1322 22 11 30
ashley.ingle@excelcurrencies.com

(Please note these rates were as of 09:40am (GMT) this morning, rates do fluctuate every 2 – 3 seconds, so please call us on 01322 221121 for a live rate)

If you need any other exchange rate, please reply.

Main News Daily Update

It is a quiet start to the week, but German industrial production and Canadian housing starts are due, while Bank of England MPC member Kate Barker is scheduled to speak at 13:00. We look for a rebound of 1.8% (consensus: 1.0%) in January for German IP, following a 2.6% fall in December. Financial markets will continue to watch the Greek economic situation closely, but strong demand for the country’s €5bn 10-year bond issue has allayed fears of a funding crisis, at least for now.

In Germany, Rebound in manufacturing orders in January (+4.3% m/m). New manufacturing orders rose by 4.3% m/m in January (-1.6% m/m). They increased thanks to a rebound in domestic orders (+7.1% m/m, after -1.3% m/m in December). Foreign orders increased by 1.9% m/m. The rebound in domestic capital goods orders suggests that investment could rise at the beginning of the year. Nevertheless, the low increase in consumer goods orders showed that household spending remained weak (-1% q/q in Q3 2009 and in Q4 2009). Germany’s Industrial Production is set to rise 0.9 percent in the year to January – the first positive reading in 17 months – as output remains supported by the lingering effects of last years’ global stimulus measures on foreign demand for the country’s manufactured goods. While the outcome may not be particularly market-moving in its own right given the themes behind it have been priced in for some time, it certainly won’t hurt an environment that seems already supportive of a near-term rebound in the Euro amid tempered concerns about the Greek budget crisis. Indeed, Greek credit default swaps dropped 79.7 basis points last week to reach the lowest level since mid-January while an auction of 5 billion euro in 10-year Greek government bonds drew three times more bidders than necessary to absorb the number of securities on offer. Investors were reassured after Athens announced another 4.8 billion euros in austerity measures and as Germany (the natural leader of any bailout effort) threw their support behind the troubled nation’s efforts while “leaking” plans for a contingency plan to funnel 25-30 billion euros through western European state-owned banks should PM George Papandreou and company fail to get their own house in order.

In US, Slight decline in payrolls in February (-36,000). Non-farm payrolls contracted by 36,000 in February. This outcome underlines the gradual moderation in job losses, as it is slightly more favourable than the 3-month average (-57,000). This report was not affected markedly by bad weather conditions. However, snow storms surely contribute to explain the slight decrease in the average number of hours worked per week (to 33.8 from 33.9 hours) as well as the marked increase in part-time work for economic reasons. The unemployment rate was stable at 9.7% in February. Unemployment data may well become less favourable in the months ahead, as a significant gain in employment is generally necessary to stabilise the unemployment rate. Hourly wages edged up by 0.1% m/m in February, so that their year-on-year pace of growth was unchanged at 1.9%.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Excel Currencies cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. If you wish to unsubscribe / cancel your subscription to this publication please reply to the email.

20 Copperfields Centre, Spital Street, Dartford, Kent, DA1 2DE
Tel: +44 (0) 1322 22 11 21 Free Fax: 0800 048 8805 Int. Fax: +44 (0) 1322 22 11 30
ashley.ingle@excelcurrencies.com

(Please note these rates were as of 09:10am (GMT) this morning, rates do fluctuate every 2 – 3 seconds, so please call us on 01322 221121 for a live rate)

If you need any other exchange rate, please reply.

Main News Daily Update

Data in the UK are for producer prices for February, where we look for further modest rises in firms input and output prices. One focus will be on whether annual PPI inflation is being boosted by the weaker pound. February’s quarterly inflation from the Bank of England forecast a spike in year-on-year price growth figures through the first quarter as higher oil prices and sterling depreciation feed through, and that seems to be precisely what is likely to drive this result. Indeed, the Core PPI reading that strips out volatile items like food and energy is set to print significantly lower at 2.8 percent. On balance, the outcome fits well within the underlying themes priced into exchange rates over recent weeks and so seems unlikely to stir much volatility given its limited implications for monetary policy at least until the release of the minutes from yesterday’s BOE policy meeting offers a bit more perspective next week. Given the dramatic decline in the pound over the past two weeks and the intensified concern surrounding the nation’s deficit as well as the trouble the upcoming election could leverage; investors were expecting something from the conclusion of the Bank of England’s policy decision. The decision to maintain the benchmark lending rate at 0.50 percent was fully expected; and the untouched 200 billion pound purchasing program telegraphed their intention to keep to their wait-and-see approach as previous shifts in policy filtered through. However, the lack of commentary was perhaps a little unnerving. While it is not unusual for the bank to not release a statement during normal circumstances, recent events and future threats somewhat warrants at least an outlook of optimism and reassurance of steadfastness from the MPC.

To colour risk appetites Thursday, investors were tuned into the European and UK monetary policy meetings as well as a few notable updates on Greece’s financial struggles. The focus wasn’t on the individual events, but the general implications these incidents have on the perception of global sovereign debt risk and the effort to withdrawal government stimulus. The rate decisions would offer little to alter the perception of a slow tightening of the collective belt. And, as for Greece, the nation executed a successful government bond sale and officials called on the EU to reveal the details on any aid the group plans to allot to the member should it be needed. These are promising steps; but their full effect cannot be assessed until risk appetites are strained and investors have to evaluate their confidence in a stable system. The ECB’s weekly main refinancing operations and the one-month auctions will continue to be with full allotment at least until 12 October 2010. That the ECB promised to give full allotment for such a long period was today’s big surprise. For the three-month auctions the ECB is moving to fixed allotment. The last 6-month auction will be at a rate indexed to the refinancing rate. This will not matter much though, as the refinancing rate is expected to remain unchanged for at least 6 months. The ECB’s assessment of the economic situation continues to become slightly more positive and Trichet emphasised that the current poor data is partly due to bad weather. Nevertheless, we still find that the ECB is too downbeat and we expect further upward revisions in June. The ECB expects inflationary pressures to be low. In their inflation projection, the upper end of their band for 2011 is nevertheless 2.1 %. They will not have to revise inflation expectations much upward before they can defend to move away from record low interest rates. The ECB is determined to move towards the exit, but at a slow pace. We expect that the ECB will move to fixed allotment at the one-month auctions in October and for the main refinancing rates at end-2010 at the latest (most likely in October too). The market reaction was for rates to rise 2-3bps higher across the curve. This may partly be driven by good US initial jobless claims coming out at 14:30. Euroland GDP growth confirmed at 0.1% q/q in Q4, but overall growth in 2009 revised down from -4.0% to -4.1%. Domestic demand dragged down growth in Q4. On a positive note however, private consumption was unchanged against expectations of further decline. Car sales pulled up private consumption as car scrapping schemes came to an end in 2009. Retail sales still show a declining trend across Europe. Euroland is falling behind the US and Asia, but it does not look like a double dip at the moment. However, downside risks have increased and the urgent need to tighten fiscal policy in some countries before sustainable growth will return is worrisome.

Turning to the fundamental health of the US economy, today’s scheduled event risk was positive net positive. The only disappointment among the notable readings coming down the pipeline was January’s pending home sales figure. Following the discouraging readings for the existing and new unit sales before it, this broadest indicator for activity in the housing market slipped unexpectedly by 7.6 percent. This is yet another sign that the government’s extension of the housing tax credit may not be enough to compensate for demand that is weakened by structurally high unemployment. Following up on the durable goods report released last week, the factory orders report grew for a fifth consecutive month by 1.7 percent. Although, excluding transportation orders, activity only rose 0.1 percent. For consumer spending – the life-blood of the US economy – the ICSC chain store sales report accelerated to a 3.7 percent annual clip, the fastest pace of growth since November 2008. As ever on the first Friday of the month, the financial market’s focus will be firmly on US non farm payroll data. We look for a negative outcome, i.e. falling employment. But the trends are improving, with the ADP report and ISM employment indices suggesting that the jobs market may soon turn up. Whilst it is still too soon to see a consistent rise in NFP, the turning point may be coming closer and the recovery will not be ‘jobless’. There were far too many job losses, 8.4m at the last count, during this recession. Purely based on the census hiring now underway, there is likely to be a rise in employment either this month or next. Excluding this one-off effect, the trend is still likely to improve in line with the slow economic recovery that seems to be underway in the US. Assistant Treasury Secretary Krueger’s comments on the report will be closely watched, as will the credit data for signs of whether US consumers are continuing to deleverage and pay down debt.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Excel Currencies cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. If you wish to unsubscribe / cancel your subscription to this publication please reply to the email.

20 Copperfields Centre, Spital Street, Dartford, Kent, DA1 2DE
Tel: +44 (0) 1322 22 11 21 Free Fax: 0800 048 8805 Int. Fax: +44 (0) 1322 22 11 30
ashley.ingle@excelcurrencies.com

(Please note these rates were as of 09:30am (GMT) this morning, rates do fluctuate every 2 – 3 seconds, so please call us on 01322 221121 for a live rate)

If you need any other exchange rate, please reply.

Main News Daily Update

Robust PMI survey data in recent days have renewed faith that the UK economy is on a stronger footing, with a ‘composite’ reading of 57.7 in February suggesting GDP growth has returned to its trend rate. However, while the improvement in the PMIs is clearly encouraging, we would caution against reading too much into this result. During economic turning points, qualitative surveys such as the PMIs (and those from the CBI) – which are constructed from percentage balances of survey respondents reporting an increase/ decrease or an unchanged level of business activity – can easily overstate the quantitative improvement in activity. Moreover, the services PMI excludes retail services, which account for around a quarter of GDP. Nevertheless, the probability of the economy dipping back into negative territory in Q1 has clearly receded. Against this backdrop, the BoE is expected to keep both Bank rate and the APF unchanged today, at 0.5% and £200bn respectively. The combination of positive economic data and a clear improvement in risk appetite trends helped turn the pound to a much needed bounce. Though, like investor sentiment itself, the rebound to this point is still tepid. Nonetheless, this turn of events was able to take attention off the country’s political/financial situation (something that won’t really hit its peak for a few more months) and back onto the steady economic recovery. The two readings of note was a rise in the February Nationwide Consumer Confidence’s survey to a January 2008 high and a three-year high from the service sector activity report for the same period. Looking ahead to tomorrow, sterling traders will look to see if the BoE will fortify confidence dampened by the expected political deadlock. Further stimulus removal would be a difficult step for the economy.

In Eurozone, Services PMI eased to 51.8 in February. Activity in the services sector continued to expand according to the final reading of the services PMI survey, albeit at a slower pace with respect to the previous month. The Business activity index eased to 51.8 in February, down for the second month in a row. Activity in the services sector, more domestically oriented, is particularly exposed to the weakness of domestic demand. Private consumption and investment are expected to remain lacklustre throughout the year. In 2010, GDP should increase by around 1%, a marked improvement with respect to the contraction of around 4% recorded last year, but still well below growth rates recorded before the eruption of financial distress. The ECB is also likely to keep its main refinancing rate on hold, at 1%, but there will be considerable interest in the terms of the final 6-month LTRO and the latest ECB staff economic projections. The second estimate of Q4 EU-16 GDP is also due this morning. Lloyds envisage an unrevised outturn of +0.1% quarter-on-quarter. Bending to the intensified pressure from the European Union to accelerate its efforts to reduce its swollen deficit (even though government officials were adamant that further steps were unnecessary), Greece announced Tuesday morning that it would take steps to further cut 4.8 billion euros from its budget shortfall. This trimming would be accomplished through increases to luxury, fuel and value added taxes as well as cuts to federal employee entitlements. This will certainly help the government meet its goal to cut its deficit from 12.7 percent of gross domestic product to 8.7 percent; but economically, it will further slow the recovery and extend the time to a full recuperation. Yet, these coerced measures were not likely aimed at putting Greece on a more stable path. Rather, this is a move whose purpose is to dampen market concerns that the nation is at risk of default and was therefore a credit risk that was not a safe investment. There is a good chance that the government’s next debt sale – necessary to raise funds to pay recent spending initiatives and rollover maturing debt – will lack a solid bid. If that is the case, it will trigger a reciprocal drop in sentiment where future debt raising efforts would come up short and the economy unable to finance its debts (a disastrous fate). These cuts may further improve payout expectations. Furthermore, these measures were likely an effort taken to appease the EU and further a 25 billion euro aid package that German lawmakers said is being contemplated.

Risk appetite is improving; and the dollar is suffering for it. Sentiment further recovered ground through Wednesday’s session after a round of impressive economic data brightened the global picture and Greece took another step towards stabilizing its financial future. Yet, as influential as these factors were, the progress that speculative interest has made is still notably restrained. The US dollar has itself may have pulled back to an intraday two-week low, but the benchmark currency has barely retraced the progress it has made over the previous three months. The same assessment can be applied to the other, risk-sensitive markets. For equities, the Dow Jones Industrial Average closed a second consecutive session relatively unchanged while the CRB commodities index has not yet broken from the range that has solidified over the past few weeks. This general bearing without meaningful pace reflects a lack of conviction and an enduring sensitivity to developments in the foundation of investor sentiment. The headline event today was the additional cuts to Greece’s ballooned deficit. This is a step that goes right to the source of the investors’ recent fears. Buying time for this financially-burdened nation offers immediate (if temporary) relief and buys time for the market’s to settle, thereby improving the financing capabilities for its government. However, in the end, this does not fully remedy the European Union’s troubles nor does it actually add a positive slant to sentiment. It merely lightens the weight of a negative aspect. More active in its support of sentiment – and subsequently a greater burden to the greenback – Wednesday was the positive round of economic data coming off the docket. The most market-friendly release was the ISM’s non-manufacturing activity report. In US, The ISM survey pointed to improved activity in the nonmanufacturing sector in February. The Non-Manufacturing Index (NMI) calculated by the ISM improved markedly in February, to 53.0 from 50.5 in January. It thus reached its highest reading since October 2007 and pointed to rising activity in this large sector. Overall, February ISM survey data suggest that the non-manufacturing sector is partially catching up the manufacturing sector, whereas the latter has clearly outperformed the former until now during the ongoing recovery. In particular, the activity index went up to 54.8 from 52.2. It thus reached its highest level since October 2007. The employment index rose markedly, to 48.6 from 44.6. The February ADP survey – which was also released yesterday – signalled 20,000 job losses in the private sector, its least unfavourable estimate since January 2008. The ADP private payrolls report for February is more derivative in its support. Though the employment gauge reported the fewest jobs lost since January of 2008 (20,000 filings), the figure was still negative. Furthermore, its value as a benchmark to the government-measured NFPs is questionable given the frequent and often sizable revisions to the report after the fact. For scope, the most meaningful fundamental report for the day was the Fed’s Beige Book. An assessment of economic health released two weeks before the central bank’s next policy meeting used to establish policy, the report could be summed up as marking a “modest” improvement in the economy over the past few months. Nine of the 12 districts reported progress while nationwide consumer spending rose in many regions. On the other hand, the labour market was labelled “soft” while commercial real estate and loan demand was considered “weak.”

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Excel Currencies cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. If you wish to unsubscribe / cancel your subscription to this publication please reply to the email.

20 Copperfields Centre, Spital Street, Dartford, Kent, DA1 2DE
Tel: +44 (0) 1322 22 11 21 Free Fax: 0800 048 8805 Int. Fax: +44 (0) 1322 22 11 30
ashley.ingle@excelcurrencies.com

(Please note these rates were as of 13.30 (GMT), rates do fluctuate every 2 – 3 seconds, so please call us on 01322 221121 for a live rate)

If you need any other exchange rate, please reply.

Main News Daily Update

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Excel Currencies cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. If you wish to unsubscribe / cancel your subscription to this publication please reply to the email.

20 Copperfields Centre, Spital Street, Dartford, Kent, DA1 2DE
Tel: +44 (0) 1322 22 11 21 Free Fax: 0800 048 8805 Int. Fax: +44 (0) 1322 22 11 30
ashley.ingle@excelcurrencies.com

(Please note these rates were as of 09:20am (GMT) this morning, rates do fluctuate every 2 – 3 seconds, so please call us on 01322 221121 for a live rate)

If you need any other exchange rate, please reply.

Main News Daily Update

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Excel Currencies cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. If you wish to unsubscribe / cancel your subscription to this publication please reply to the email.

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Tel: +44 (0) 1322 22 11 21 Free Fax: 0800 048 8805 Int. Fax: +44 (0) 1322 22 11 30
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