Pound Sterling - UK Markets

The UK global goods deficit narrowed sharply and by more than expected to GBP7.3 billion in February, as exports to countries outside the European Union rose rapidly, the Office for National Statistics has said. Analysts had predicted a deficit of GBP7.6 billion. Exports to non-EU countries rose by 13% in the month, with economists pointing to a weaker pound as the reason for the increase in exports.

According to the Office for National Statistics, UK factory gate prices posted their weakest annual increase since 2007 in March following a record drop in petroleum product prices. Output producer prices increased 0.1% on the month and 2.0% on the year, the weakest rise in annual terms since July 2007. Economists were expecting output prices to increase 0.1% on the month and 2.1% on the year.

Following these data releases, the pound has slipped against its major counterparts and is currently trading at an interbank rate of between 1.0906-1.1106 against the euro, 1.4641-1.4841 against the US dollar and 146.84-146.86 against the Japanese yen.

US Dollar - US Markets

Notes from the last meeting of US Federal Reserve policy makers show just how downbeat they had become on the state of the US economy. It was this pessimism that led them to agree to spend more than USD1 trillion to revive its fortunes. The minutes also revealed that the US economy had deteriorated more than policymakers had expected since the turn of the year. However, despite the depth of the recession, the committee said that it expected recovery to begin in 2009.

Euro - European Markets

The German government has launched a takeover offer for troubled lender Hypo Real Estate. The government's bank rescue fund said it was offering shareholders 1.39 euros per share, 15.8% higher than its last closing price of 1.20 euros. HRE has been Germany's highest-profile casualty of the financial crisis.

Italian industrial production, adjusted seasonally and for the number of working days, has fallen 3.5% in February from the month earlier - a greater amount than expected - as investment goods slid, Istat said today. On the year, February's industrial production plummeted 20.7%, more than expected and compared with a downwardly revised 17.6% drop in January. The annual decline in February was the steepest since the index began in 1990.

The Netherlands' annual inflation rate was flat on the month at 2% in March, according to the Dutch Central Bureau for Statistics. A rise in the price of clothing was balanced by falls in the prices of fresh vegetables, diesel and energy. According to the European Harmonised Index of Consumer Prices, or HICP, Dutch inflation came in at 1.8% in March, the bureau said, compared with a eurozone average of 0.6%.

Other Currencies - Highlights

Australia's unemployment rate jumped to 5.7% in March from 5.2% the previous month, the biggest monthly rise in 18 years, figures from the Australian Bureau of Statistics have shown. The total number of people unemployed increased by 52,900 in March to 650,900. Analysts now expect the Reserve Bank of Australia to cut interest rates again, after it reduced them to a record low of 3% earlier this week.