The German ZEW index proved to be amixed bag for the euro yesterday with hawkish comments saving the euro somewhat. Although the sentiment index dropped lower comments made with the release indicated that an ECB interest rate rise could be made soon given the ‘inflation backdrop’ in the Eurozone.

Weak PPI out of the US yesterday halted the recent exuberance of dollar buying and saw it move gradually back to the 1.97 level. Analysts believe that this could undermine recent thoughts of a Fed rate rise in the short term.

Today is a day full of volatile tier 1 data. Euro watchers will be focused on the German IFO climate reading; with growth expectations forecast to dip it should be enough to break GBP/EUR out of its recent doldrums.

Minutes are also published by the Bank of England and FOMC from their most recent meetings; we think Blanchflower and Gieve dissented on this month’s hold instead voting for a 25bps cut. The Fed’s minutes will be also closely watched for details of the rapidly contracting housing sector.

Today’s Data
Germany: 09.00 IFO Business Climate
Expected: 102.0
Previous: 102.4
UK: 09.30 BoE Minutes
Expected: 7-2
Previous: 6-1-2
UK: 09.30 PSNCR
Expected: -£2.5bn
Previous: £12.7bn
US: 19.00 FOMC Minutes
Indicative Rates
Sell Buy
GBPEUR 1.2541 1.2566
GBPUSD 1.9622 1.9646
EURUSD 1.5633 1.5653
GBPJPY 202.00 204.09
GBPAUD 2.0435 2.0484
GBPNZD 2.5387 2.5365
GBPCAD 1.9401 1.9450
GBPZAR 15.02 15.08
USDZAR 7.65 7.68
GBPPLN 4.2357 4.2621
Rates are dependent on amount transacted
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Email: (jeremy.cook@worldfirst.com) Please feel free to contact me at anytime regarding these briefings, if you have any questions or thoughts on them, or if you are interested in a particular event in the calendar.Please call us on 0800 783 6022 / +44 20 7801 9080 if you would like to discuss the markets or fix a rate.

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The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the authors own judgement as of the date of the briefing and are subject to change without notice.

Any rates given are interbank and therefore for amounts of £5million and so are not indicative of rates offered by World First for smaller amounts.

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