The currency blog

The Greeks smashed their Bond issue sale yesterday and sold €1.6billion in one their most important Treasury bill auctions. The combination of six and twelve month loans surpassed expected demand by €360million. The attractive rates offered at nearly 4.9% gained much interest from short term traders and caused a short rally on the Euro against Sterling and the Dollar. However, as the afternoon progressed, the markets returned to an unconvinced attitude as concerns crept in on Greece’s overall long term debt issue.

Back to UK and we had a brief Sterling rally yesterday as the ONS stated that Britain’s goods trade gap dropped to £6.179bn in February, an unexpected improvement of close to £1bn. Exports leapt by 9.5% in the same period, the largest rise since Jan ’03. Also, reports of house price rise outnumbered reports of house price decline according to the Royal Institution of Chartered Surveyors. However, it must be noted the Pound has still given up almost all its gains during the past 24 trading hours with the election’s ubiquitous presence over the currency.

In other market news today we have major figures out in the US with Retail Sales expected to show 1% growth month on month against a 0.3% growth last month. Always considered a significant figure by the markets, as consumer spending equates to approximately 66% of the US’s overall economic activity. In addition, we have CPI inflation data out, which is expected to be a monthly increase of 0.1% adding to the overall 2.4% annual figure. The Fed will have keen eyes of these figures to obtain a clear indication of any future fiscal policies despite recently saying any interest rate rise is a long way off.

Look for some market volatility around 13.30BST if figures are wider than these expected marks.

Discuss on this on the Currency Exchange Forum