Daily Market Report 24/01/14

EUR

The euro advanced the most in almost four weeks against the dollar as a measure of manufacturing, rose to the highest in more than 2 1/2 years, boosting optimism that growth in Europe is gathering pace.

The better than expected euro zone data also caused the pound to drop from its yearly high that we saw earlier this week.

USD

The dollar continued to fall following a report yesterday, which showed the number of Americans continuing to receive unemployment benefits unexpectedly rose. This adds to the data from earlier this month where there were only 76,000 jobs added this month, well below market expectations.

GBP

Speaking at the World Economic Forum at Davos Mark Carney once again ruled out any immediate interest rate rise commenting that despite the improving job market, unemployment was no longer enough to guide monetary policy. At the moment the BoE’s forward guidance dictates that there is 7% unemployment rate threshold where the BoE will then look at raising the rate of interest.

Carney is set to disclose in more detail what future guidance may be this afternoon in a press conference.

Key Announcements:

9.30am – GBP – BBA Mortgage Approvals: Expected to rise to 47,200.

12.05pm – GBP – BoE Governor Mark Carney Speech.

13.30pm – CAD – Consumer Price Index (Dec): Expected to rise to 1.3%.

17.00pm – EUR – ECB President Mario Draghi Speech.