Analysis and Recommendations:
The GBP/USD is currently down against the USD. There were several economic events in the UK which helped push the Sterling up to the high of 1.5923. The pair began to fall as the USD picked up strength on the back to back testimony of Bernanke and Geithner in the US. The pair ended the day at 1.5843 down from the morning opening of 1.5864.
British Treasury chief George Osborne said there was no need for further fiscal tightening by the British government as he presented a 2012-13 budget plan to the House of Commons that he declared to be neutral over the next five. British Chancellor of the Exchequer Osborne also moved to cut the top personal rate of taxation from 50% to 45% today.
The Bank of England's rate-setting Monetary Policy Committee voted 7-2 to hold its asset purchases at 325 billion pounds ($516 billion) at its policy meeting earlier this month.
Borrowing by Britain's public sector, excluding financial interventions, jumped to 15.2 billion pounds ($24.2 billion) in February from 8.9 billion pounds in the same month last year, the U.K. Office for National Statistics reported.
On the other side of the pond as they say, the sales of existing homes fell 0.9% in February after an upward revision to the prior month, as improving job prospects, cheaper homes and warm weather led to the best start to the year since the bursting of the housing bubble. The housing market is ripe for a rebirth, now that the jobs market seems to be doing better.
Osborne's American counterparts testified before US lawmakers.
While the reduction in financial stress in Europe is a welcome development, more needs to be done to fully resolve the crisis, says top U.S. central banker Ben Bernanke. Treasury chief Tim Geithner's also to deliver congressional testimony. The testimony gave an extra push to the USD. Both men had positive attitudes which translate into strength for the USD and the US economy on the whole.
The position of the United States has generally been that Europe needs to really step up and do a lot more, Bernanke said. He and Treasury Secretary Timothy Geithner testified before the House Oversight and Government Reform Committee.
European leaders must strengthen the banking system, build a stronger financial backstop to guard against contagion in sovereign-debt markets, and critically take steps to increase growth and competitiveness and reduce external imbalances in the region's troubled countries, Bernanke said.
Europe's financial and economic situation remains difficult, and it is critical that European leaders follow through on their policy commitments to ensure a lasting stabilization, Bernanke said.
Economic Data March 21, 2012 actual v. forecast
MI Leading Index (MoM)
Credit Card Spending (YoY)
All Industries Activity Index (MoM)
Thai Trade Balance
Thai Interest Rate Decision
MPC Meeting Minutes
Public Sector Net Borrowing
German 2-Year Schatz Auction
MBA Mortgage Applications
Leading Indicators (MoM)
Fed Chairman Bernanke Testifies
Existing Home Sales
Mexican Retail Sales (YoY)
09:00 EUR French Manufacturing PMI
09:30 EUR German Manufacturing PMI
10:00 EUR Manufacturing PMI
The European, French, and German Manufacturing Purchasing Managers' Index (PMI) measure the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company's performance, which can be a leading indicator of overall economic performance.
10:30 GBP Retail Sales (MoM)
Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.
11:00 EUR Industrial New Orders (MoM)
Industrial New Orders measures the change in the total value of new purchase orders placed with manufacturers. It is a leading indicator of production.
13:30 USD Initial Jobless Claims
13:30 USD Continuing Jobless Claims
Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.
17:00 EUR ECB President Draghi Speaks
Mario Draghi (born 3 September1947) is an Italian banker and economist who has been governor of the Bank of Italy and succeeded Jean Claude Trichet as President of the European Central Bank starting November 2011. As head of the ECB, which controls short term interest rates, he has more influence over the EUR value than any other person. His comments may determine a short-term positive or negative trend.
Government Bond Auctions (this week)
Mar 22 10:10 Sweden I/L bond auction
Mar 22 10.30 UK Auctions 0.625% 2042 I/L Gilt
Mar 22 15:00 US
Announces auctions of 2Y Notes on Mar 27, 5Y Notes on Mar
28 & 7Y Notes on Mar 29
GBP/USD Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3