Home » Currency Market Update 21/01/10

The Pound unemployment fell at the fastest pace since April 2007 last month. Claims for jobless benefits declined 15,200 to 1.61 million, according to the Office for National Statistics. A measure of unemployment showed it was the first quarterly fall in 18 months. The figures could help PM Gordon Brown, who is trailing in opinion polls with a general election due by June. While reported employment levels look to be stabilizing, companies could still be reluctant to start hiring again as the economy struggles. As I have stated in previous updates, now an election is around the corner are we going to see a string of positive data. However BOE Governor Mervyn King said yesterday a rise in inflation probably won't last and he then voiced his concern over the record budget deficit. The pound is also making gains against the Australian, New Zealand and Canadian Dollar.

The Dollar Stocks and commodities tumbled, while the dollar and Treasuries rose, on concern China's moves to curb lending will slow the global economic recovery. The dollar strengthened versus all 16 major counterparts, while the 10-year Treasury yield fell five basis points to 3.65 percent. Gold and oil futures tumbled more than 2 percent.

The Euro Greek bonds crashed, pushing the yield on the two-year note up by almost 90 basis points, on concern the government will struggle to sell the debt it needs to fund the biggest budget deficit in the European Union. This is causing the recent downturn in the euro as it struggles to stop the Pound and the US Dollar making heavy gains. However Sterling gains are just as much due to Euro weakness as pound strength.

Data released 21th Jan
AU New motor vehicle sales
JP Leading indicator (F)
FR Flash Services PMI
FR Flash Manuf. PMI
EURO Flash Composite PMI
EURO Flash Manuf. PMI
UK M4 Money Supply (P)
UK Public Finances (PSNCR)
UK CBI Quarterly Industrial Trends
US Initial Claims
US Philadelphia Fed Survey

Live IB Rates 8.38 am
GBP-EURO 1.15
GBP-USD 1.62
GBP-AUD 1.776
EURO-USD 1.408