Daily Market Report 09/12/2013

GBP

The pound was boosted in early trade on Friday after building society Halifax revealed that house prices increased by more than expected in November to 7.7%.

However the currency struggled to hold onto these early gains as market continued to digest the Bank of England’s decision on Thursday to hold the interest rate at 0.5%.

EUR

Despite data from German disappointing and showing that factory orders for November fell to 1.9% from 7.8%, the euro continued to be supported following Thursday’s monetary policy statement by Mario Draghi of the ECB.

Despite recent rumours, the ECB gave no indication that negative interest rate will be introduced. As a result the euro rallied to a four week high against the US dollar and finished higher on the week against the pound.

USD

Data from the US beat expectations on all fronts on Friday causing bets to double that the Fed may look to taper quantitative easing potentially .

The number of new jobs added increased to 203,000, more than the expected 180,000 economists were expecting. Adding to this the unemployment rate fell to a five year low to 7% in November from 7.3% in October. Data from the Reuters/Michigan consumer sentiment index also increased more than expected 82.5

Whilst the US dollar gained initially off the back of the data, it would appear that the markets were expecting a good print as profit taking on the US dollar following the data soon ensued causing the US dollar to finish lower across the board on Friday.

CAD

The Canadian dollar caught some relief on Friday following slightly better figures from their job market. Whilst the unemployment rate remained at 6.9%, the net change of employment in November increased more than expected to 21,600.

Today

Data from the Eurozone will be in focus today with German trade balance and industrial production figures both set to improve in November. As well as this, the Sentix investor confidence is set to have improved in December. As a result, we could well see a continuation of euro strength.

Comments from James Bullard and Richard Fisher, members of the Federal Reserve, will be in focus this evening to ascertain any gauge of when the Fed will look to taper QE.

Key Announcements:

9.30am – EUR – Sentix Investor Confidence (Dec): Expected to increase to 10.4.

11.00am – EUR – German Industrial Confidence (Oct): Expected to increase.

13.15pm –CAD – Housing Starts (Nov): Expected to fall to 195,000.