The Pound made gains against the Dollar while declining against the Euro as weak Trade Balance data was released. Total Trade Balance widens to -7.3 billion verses -6.6 billion as forecasted. The RICS housing monitor saw a net 20% of real estate agents report a drop in the number of interested buyers, though a net 32% reported a rise in prices. The BRC retail sales monitor found same-store sales volumes down 0.7% on a year ago, and total sales up 1.2%, the slowest pace of increase in 15 years. Raising the VAT rate back to 17.5% may have also weighed on spending.
The Dollar declined against the Euro and the Pound as equities and commodities traded higher. With limited economic data out, the market is increasingly trading on the strength of equities. Also to note all eyes will be on Chairman Bernanke is scheduled to speak in front of the House of Senate today, which will provide further market guidance for the Dollar.
The Euro made gains against the Pound and the Dollar on speculation that Greece’s budget deficit will receive aid from European authorities. President, Jean Claude Trichet’s expected attendance of the European Union summit suggests that the meeting will further address Greece’s rising deficit issues. A concrete bailout solution along with firm policy actions will likely boost the euro further against the Pound and the Dollar. However, if the EU summit fails to come up with a solid plan of action, continuing decline of the euro may be expected. Also to note better-than-expected German Trade Balance data further aided the Euro.
Data released 10th February 2010
UK 09.30 Industrial Production (December)
Manufacturing Production
UK 10.30 BoE Quarterly Inflation Report
US 13.30 International Trade Balance (December)
UK 15.00 NIESR GDP Estimate (3 Mths to January)
US 19.00 Federal Budget (January)
