Currency Exchange

The Pound The UK's trade gap with the rest of the world widened in January to its largest since August 2008. Exports saw their biggest drop in over three years, according to the Office for National Statistics. The UK's trade gap in goods and services widened to £3.8bn, compared with £2.6bn in December. The news came as a disappointment and caused the pound to weaken, below 1.10 on the Euro and below 1.50 on the US Dollar. It was believed that sterling is so weak against most of the majors that UK exports would increase as other countries would take advantage of the cheap Pound. The brains of Briton failed to recognize one thing. We have to have a manufacturing base to have a large amount of exports. Shadow business secretary Ken Clarke said: "We need to build a new economic model based on saving, investment and exports instead of the debt-fuelled model of the last decade."

Meanwhile in an interview on Sky News yesterday Adam Posen said BOE officials are counting on their 200 billion-pound bond-purchase program to have succeeded in restoring the economy to growth. " We believe growth will pick up from here," Posen said. "It's not going to go gangbusters. We had to go down from what we said before, but it's still going to be strong. And in that case, there's no need for more quantitative easing."
A big day today for both the UK and the Euro-zone, we could see a lot of movement and possibly the Dollar will once again take advantage of both currencies

Major Data out Today
AU Housing Finance
DE Current Account (nsa)
DE Trade Balance
DE Current Account (nsa)
DE Trade Balance
DE CPI (F)
DE HICP (F)
UK Industrial Production
UK NIESR GDP Est
JP GDP (F)

Live IB rates at 5.55am UK
GBP - EURO 1.1007
GBP - USD 1.497
GBP - AUD 1.635
EURO - USD 1.359

The Pound The Royal Institution of Chartered Surveyors has claimed new instructions outpaced enquires from new buyers in February. This is the second month in a row. The rise in house prices during the past year has been attributed by many commentators to a shortage of stock for sale. Meanwhile Retail sales had some recovery from a tough January on the High Street, figures from the British Retail Consortium showed that Like-for-like sales were up 2.2%, compared to the 0.7% fall in January.

The Dollar looks set to steam ahead into the 1.40's against the pound as it breaks the 1.50 level with conviction. The markets have opened this morning pound negative as the Dollar once again gains on both the Pound and Euro.

The Euro Greek prime minister has called on the US to help curb the financial speculators. He blames the speculators for exacerbating his country's debt problems. George Papandreou said he wanted to see the US impose stricter regulations on hedge funds and currency traders.

Major Data out Today
UK BRC Retail Sales Monitor (Total)
UK RICS Housing Survey
JP Leading indicator (P)
AU NAB Business Confidence
CH CPI
UK Trade Balance, Non-EU
UK Visible Trade Balance, World
AU Westpac Consumer Confidence

Live IB rates at 9.35am UK
GBP - EURO 1.1007
GBP - USD 1.495
GBP - AUD 1.648
EURO - USD 1.357