Daily currency report

The Swiss franc and yen are trading at lower levels, while the Aussie and New Zealand dollars have made strong gains. The move comes at the end of the first quarter and could be partially influenced by investors closing out positions. An improved risk appetite also encouraged the move as equity markets across Asia remained in positive territory. Economic data released in the US was disappointing, but offset by hawkish comments from Federal Reserve officials. In the UK, economic data was mixed, showing slightly better results for fourth quarter growth, mortgage approvals and consumer credit.

Sterling

Economic data released in the UK was mixed and left sterling rather directionless. The final release of Q4 GDP data showed that the economy contracted by 0.5 per cent on the quarter rather than the originally reported 0.6 per cent. Consumer credit rose, as did mortgage approvals, but lending figures were weak. Mortgage approvals data rose to four-month highs, while the consumer credit figures returned to positive territory.

US dollar

The US dollar opens little changed from the last trading levels against most major currencies, with the only exception being the yen, which has weakened. Economic data released in the US was not supportive, but was offset by hawkish comments from two Fed officials.

Euro

The euro can officially be compared with Teflon now; nothing negative sticks to it. S&P, a rating agency, downgraded the ratings of Portuguese and Greek debt. The downgrade only had a small negative impact on the euro. There is news that Portugal is considering revising its accounting standards. More details are needed, but the direction does not look encouraging.

Japanese yen

Preliminary industrial output data came in at 0.4 per cent for the month of February. The data is encouraging as it reflects a pick-up in the economy prior to the crisis, but the yen’s gains are of a more seasonal sort. With the fiscal year beginning in two days, Japanese investors are already starting to send money abroad to reap higher yields. The yen opens this morning near 10-month lows against the euro and three-week lows against the US dollar.

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