Negative talk hurts sterling | Smart Daily Currency Note

Sterling

Yesterday was a bad day for the UK economic outlook and a bad day for sterling. In his quarterly inflation report, the Governor of the Bank of England cut growth forecasts for the UK, saying that there are "big challenges" ahead and also hinted towards more monetary easing when he said “If necessary, we will do more.” Sterling dropped against all of its major peers by at least half a percent, broadly trading 0.7% lower than 24 hours earlier. Moreover, the Confederation of British Industry (CBI) lowered its growth forecasts for 2013 from 1.4% to 1%. In spite of this, the FTSE 100 reached a fresh 5 year highs, possibly due to foreign investors making the most of sterling’s weakness. With no releases there is unlikely to be a change in sterling's fortunes in the short term, and longer term forecasts from major banks aren't sterling positive either, so it looks as if sterling to be weak for the foreseeable future. Get in touch for an up to the second price, and more news.

Euro

The euro declined against the majority of its 16 most-traded peers early yesterday due to data coming out from the peripheral troublemaker Portugal, with the rise of the jobless rate in the country now at its highest level in the counties history. The situation changed later however, as the Euro-area's industrial production data showed a bigger increase than was forecast. This could be a sign that Europe’s recession is easing somewhat and today we will see more clues on the state of the Eurozone with Euro-area wide preliminary GDP data released. An overall contraction of 0.4%  is predicted and even Germany - the Eurozone’s powerhouse - is expected to show a contraction of 0.5%. Call in now for the latest news from the Eurozone and live prices on the euro.

US dollar

The US dollar struggled yesterday, weakening against most of its major trading peers – but performed well against sterling. President Obama’s speech included plans to use $1 billion to create 14 manufacturing institutes, change the tax code which benefits companies that expand in the US and create a trade deal with the EU. Retail sales figures came out as expected showing growth of 0.1%. Out today we have the weekly unemployment claims data, a 30-year bond auction and another member from the FOMC will be speaking. Get in touch now for an up to the second price, and the latest news.

Worldwide

Elsewhere, the South African rand was, for once, an outstanding performer yesterday. Bets that the global economy was picking up saw metal prices rise, bringing key producers up with it - the rand gaining by as much as 0.6%. The Swedish Krona rose to a four month high against the euro as the central bank chose to refrain from easing monetary policy, which would weaken the currency, in spite of the Finance Minister's comments last month that the high price was harming exports. A two-year high in consumer confidence down under brought the Australian dollar up against most major peers. Today, the spotlight is on Japan and the statement from the Bank of Japan on monetary policy. After the G7's statement last week, expect traders to be listening closely, and for a huge amount of volatility. Give us a call for news on your currency, and for the best rates.