Daily Market Report 19/02/2013

Comments made by Martin Weale, Bank of England policy maker, drove the pound to a seven month low against the US dollar.

With US markets closed to celebrate Presidents day and on a day with little economic data to direct markets, the pound was in the spotlight once again as Weale endorsed the recent decline of the currency, stating that it should boost exports as well asreducing the UK’s current account deficit.

The timing of Weale’s comment couldn’t be timed any worse for the pound ahead of the Bank of England minutes on Wednesday, where we may see a reiteration of January’s minutes, which stated that the pound’s valuation was too high to boost the ailing economy.

The only other notable news from the day came from comments made by Mario Draghi. He told members of the European parliament that although Europe is currently more stable than it has been in recent years; risks to the downside still remain. He cites that exports may be weaker than originally anticipated and that local governments may not implement structural reforms as quickly as hoped.

The Australian dollar saw a bit of relief in early morning trade as the Reserve Bank of Australia monetary policy meeting revealed that the bank would wait to assess the economy before deciding to cut rates again. It had been rumoured over the last few weeks that the RBA were looking to cut interest rates very soon.

The focus today will be on the euro zone with ZEW economic sentiment out from Germany and the euro zone bloc.

Key Announcements:

10.00am – EUR – German ZEW Survey Economic Sentiment: Expected to increase to 35.0.

10.00am – EUR – Euro zone ZEW Survey Economic Sentiment: Expected to increase to 35.5.

13.30pm – CAD – Wholesale Sales (Dec): Expected to fall 0.4%.

15.00pm – USD – NAHB Housing Market Index (Feb): Expected to increase to 48.