Live Forex Market news and Analysis | FX Market News

Past Events

• CB Consumer Confidence, out at 52.5 versus expected 50.1, prior 46.4 (revised)
• GBP Final GDP, out at 0.4% versus expected 0.3%, prior 0.3%
• GBP Nationwide HPI, out at 0.7% versus expected 0.2%, prior -0.8% (revised)

Upcoming Events

• USD ADP Non-Farm Employment Change (1215 GMT)
• CAD GDP m/m (1230 GMT)

Market Commentary

U.S. consumer confidence rebounded in March after falling sharply in the prior month, the Conference Board said Tuesday. The consumer confidence index rose to 52.5 in March from 46.4 in February. Confidence had dropped significantly in February from 56.5 in January. The gain in confidence was greater than forecast, economists had predicted the index would increase to 51.0.

However Lynn Franco, director of the Conference Board’s consumer research center was cautious about the pick-up, saying that consumers continue to express concern about current business and labor market conditions.

“Their outlook for the next six months is still rather pessimistic,” Franco said. “Despite this month’s increase, consumers continue to express concern about current business and labor market conditions. Overall, consumer confidence levels have not changed significantly since last spring.”

The share of consumers who said jobs are plentiful advanced to 4.4% from 4%. The proportion of people who said jobs are hard to get decreased to 45.8, the fewest since August. More people also anticipated incomes and employment would improve in the next six months, the report showed.

Data also showed that home prices unexpectedly rose in February. Rising stock prices, a stabilizing housing market and fewer firings may be giving households hope that the recovery from the worst recession since the 1930s will be sustained. The 184,000 increase in payrolls economists project for this month shows it will take years for the economy to reverse the loss of 8.4 million jobs since the contraction began in December 2007.

Home prices in 20 U.S. cities rose 0.3% in January, indicating the housing market is stabilizing as the economy expands. The S&P/Case-Shiller home-price index climbed from the prior month on a seasonally adjusted basis after a similar gain in December.

Cheaper homes, low borrowing costs and government incentives have combined to support the housing market after its collapse helped trigger the recession. Fed officials this month signaled the U.S. recovery isn’t strong enough to stoke inflation, reduce unemployment quickly or justify an end to record-low interest rates.

While the economy has “continued to strengthen,” policy makers said in a statement after their March 16 meeting that “employers remain reluctant to add to payrolls.”  Unemployment is projected to end the year at 9.5%.

The US Dollar rose against Sterling yesterday as the Pound slipped 0.64% to close the day’s trading at GBP 1.5071. The US Dollar slid 0.38% against the Euro closing at EUR 1.3424.

Later today American ADP Non-Farm Payrolls are due for release. The figures always shake the markets but it is not always a good predictor of Non-Farm Payrolls which will be released on Friday. Last time the figure showed a loss of 20,000 jobs. This time an increase of 41,000 jobs is predicted.

Yesterday saw the Canadian Dollar rise for the second day against its US counterpart as gains in global equities and crude oil spurred demand for commodity currencies. It gained 0.20% against the US Dollar during trading to close at CAD 1.0192. The previous day it advanced 0.51% or 0.05 cents against the US Dollar to CAD 1.0214.

The currency has gained 3.6% against the US Dollar so far this year, the second best performer after the Mexican Peso among the 16 most traded currencies in the forex market. It will be the fourth straight quarterly rise for the currency, which tends to rise and fall with commodity prices.

“The Canadian Dollar remains a Forex Trading market favorite and after a brief correction last week appears to be back on track for a move towards parity”, said Steve Butler, director of foreign exchange trading in Toronto at Bank of Nova Scotia, Canada’s third largest lender. The Canadian GDP monthly figures are due for release later today.

In the UK official figures have shown that the UK economy emerged from recession faster than was previously estimated. Data from the Office for National Statistics said the economy grew 0.4% between October and December in 2009.

This was faster than the previous estimate of 0.3% growth during the quarter. The ONS said the upward revision was due to higher output from business services, construction and agriculture. For the year 2009 as a whole, GDP contracted by 4.9%, the ONS said. The previous estimate had been for a contraction of 5% over the year. GDP in 2008 grew 0.5%.

Jonathan Loynes, economist at Capital Economics, said the headline GDP numbers were good news but the big picture of a fragile and unbalanced recovery remains unchanged.

The Pound rose 1.01% against the Euro during trading yesterday to close the day at GBP 0.8906. Against the US Dollar the Pound fell 0.64% to close trading at GBP 1.5071.

Elsewhere in the UK, house prices rose in March as potential sellers delayed putting their properties on the market, sustaining values as demand waned, said Nationwide Building Society.

The average cost of a home increased 0.7% to 164,519 pounds ($246,260) from February, the mortgage lender said. Prices fell 0.8% last month. Home values are now 9% higher than a year earlier. In London, prices jumped 2.5% in the first quarter.

“The number of homes for sale has not increased appreciably, meaning that the impact of lower buyer activity on house prices has not been too negative,” said Martin Gahbauer, chief economist at Nationwide. “With greater than usual political and economic uncertainty ahead of the upcoming general election, potential homebuyers are proceeding cautiously.”

The report adds to evidence of an uneven recovery in the U.K.’s housing market after last year’s slump. While mortgage approvals dropped to a nine-month low in February as banks keep a grip on credit, a lack of supply is keeping values stable. In London, a weaker Pound and a revival of bankers’ earnings have helped spark a “mini boom,” Nationwide says.