Dear Subscriber, Please find below today's update which gives you an insight into the current market conditions, enabling you to keep informed and up to date on the latest currency movements. GBPEUR/GBPUSD The Pound continued in the ascendancy against the Euro yesterday, rising to a high of 1.2150 and the UK currency seemed unperturbed by reports that the UK trade deficit widened by the most in three months in February. The government report showed that the gap in goods and services extended to £8.77 billon, from a revised £7.88 billion in January. The report fuels concerns that the UK economic recovery will be limited due to a fundamental lack of demand from the European market and elsewhere for UK exports. The government is banking on exports to help sustain the recovery, as manufacturers and consumers alike struggle to cope with rising unemployment and inflation. Nonetheless, the Pound stood firm and also remained significantly above 1.59 versus the U.S Dollar. The UK currency traded at the highest level in three months versus the Euro, as Italian borrowing costs increased at a debt sale, underpinning the appeal of UK assets as a haven from the European sovereign debt crisis. The Pound slipped a little over-night following the Rightmove house price data and a wider U.S recovery. The recovery in risk appetite saw the Pound decline over 1% against the Australian Dollar, dropping below 1.53 by the close of trading last night. The Aussie Dollar and the rest of the higher-yielding currencies came under renewed selling pressure over-night, after data showed that the Chinese economy slowed by more-than-expected in the first quarter. EUR/USD The Euro bounced back against the Pound last night, as the UK currency encountered strong resistance in the region of 1.2150. The single currency also remained largely resilient versus the U.S Dollar, as global risk appetite continued to improve through the course of the day, reducing demand for the U.S currency as a safe haven. There are still widespread concerns over the peripheral economies in the Euro-zone and there were expectations that Italy would be forced to accept higher yields at the latest bond auction, which dampened sentiment towards the Euro. Yields did rise through the day but the market was expecting a weak outcome and this limited the impact in the market. There was also a sense of relief over the immediate Spanish debt trends, which helped curb selling pressure, despite the underlying lack of confidence in the outlook. In the U.S, the latest trade data showed a decline in the deficit to $46 billion for February, while the jobless claims data was also weaker than expected with an increase of 380,000.
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