USD

The US dollar continued to gain yesterday after data
showed that the number of people filing for jobless claims didn’t rise as much
as expected – the rise was only 5,000 instead of 12,000.

Adding to this we saw the Philadelphia Fed Manufacturing
Survey reveal an improvement in figures up to 9 in February from -6.3 in
January.

The US dollar as a result reached a 2 ½ week high against
the euro and a 6 week high against the pound.

USD

The US dollar continued to gain yesterday after data
showed that the number of people filing for jobless claims didn’t rise as much
as expected – the rise was only 5,000 instead of 12,000.

Adding to this we saw the Philadelphia Fed Manufacturing
Survey reveal an improvement in figures up to 9 in February from -6.3 in
January.

The US dollar as a result reached a 2 ½ week high against
the euro and a 6 week high against the pound.

Whilst the reaction from the markets following the
comments about a possible rise in interest rates occurring within the next year
in the US, may well be an exaggeration; the possibility and continued
speculation surrounding a rate hike could well drive the US dollar stronger.

INR

The Indian rupee rebounded from its biggest drop since
January on optimism that a recovering economy will attract inflows even if the
US keeps cutting stimulus.

Reports this month showed that Inflation in India is
easing and industrial production is picking up and whilst there may be an
economic slowdown in China, India is less exposed and thus the slowdown shouldn’t
effect India as much as the other Asian economies

Foreign funds have pumped US$3 billion into Indian stocks
and bonds this month – a clear indication of confidence coming back into the
economy.

As a result, further upside on GBPINR could well be
limited.

Today

Federal Reserve President Richard Fisher speaks today
about US monetary policy in London today and we also have latest retail sales
and inflation data from Canada.

Key Announcements:

12.30pm – CAD – Consumer Price Index (Feb): Expected to
decline to 0.9%.

12.30pm – CAD – Retail Sales (Jan): Expected to increase
to 0.7%.