Daily market report 20/12/2012

Currency markets continue to be dominated by the ongoing Fiscal Cliff negotiations between President Obama and Republican House Speaker John Boehner.

Yesterday morning, due to optimism that a deal could be reached, we saw the US Dollar weaken against the majority of its counterparts, with Sterling rallying towards the previous yearly highs set in April and September. However as the day progressed and going into yesterday evening, we saw the US Dollar regain some of its losses over doubts that a deal could be reached before the year end after a spokesman from the White House said that they would veto the tax and spending proposals made by John Boehner.

The Euro gained support yesterday due to investor’s appetite for risk as well as encouraging data from Germany, causing the single region currency to print a two monthly high against the Pound.

Producer Price Index released from Germany this morning have come in as expected at 1.4% and UK Retail Sales figures released this morning have fallen below the expected 1.5% coming in at 0.9% year on year, disappointing the markets and causing immediate pressure on the Pound.

As stated above, currency markets and investor appetite for risk will continue to be dominated by Fiscal Cliff negotiations and given the moves we saw yesterday, especially in the Sterling/US Dollar, acting quickly or leaving orders with our dealers will allow you to get the most of the current market conditions.


Key Announcements Today:

 13.30pm – USD – GDP: expected to marginally increase to 2.8%

13.30pm – USD – Personal Consumption Expenditures Prices: expected at 1.6%

13.30pm – USD – Core Personal Consumption Expenditures: expected at 1.1%

15.00pm – EUR – Consumer Confidence: expected to marginally increase to -26.85

15.00pm – USD – Existing Home Sales Change: expected to decrease to 1.3%

15.00pm – USD – Philadelphia Fed Manufacturing Survey: expected to increase -3