Sterling
Sterling yesterday lost ground against the euro but held its own against the US dollar. CPI data showed that headline inflation of 2.8% remained above the Bank of England’s target of 2.0%. Sterling dropped to a six-week low against the euro and looked susceptible to further weakness in light of continuing concerns about the British economy. An official from the IMF suggested it may be time for the UK to consider altering its current fiscal plans in light of very weak private demand. Inflation levels may weigh on growth and it remains difficult to predict whether GDP figures next week will identify a triple-dip recession. The minutes from the latest Bank of England monetary policy meeting released today will be closely watched; if we see another member of the Monetary Policy Committee voting on further quantitative easing this will have a palpable and negative effect on sterling prices, so call in for market reaction and the latest rates.
In spite of disappointing German economic sentiment reports released early in the morning, the euro was one of the best performing currencies yesterday reaching a one and a half month high against sterling and the US dollar where it challenged the key 1.32 resistance level. The seventeen-nation currency showed a broad firmness against most of its major peers; boosted by central bank demand as well as high gains made against the Japanese Yen as it recovered from weakening on Monday. Italian Trade Balance data which was much better than expected helped support the euro whilst consumer price index figures revealed annual inflation went down to 1.7% in March. The Eurozone economic calendar is fairly thin today with only the German 10-year bond auction of note. However, as traders start to ponder if Slovenia will be next Cyprus, Italian lawmakers vote to elect a new president on Thursday and problems surrounding Portugal come to light – there is always the potential for news to impact euro strength. Get in touch for the latest rates.
The US dollar had a very poor day yesterday, weakening against all its major counterparts bar the Japanese yen as building permits data and head line inflation figures both fell short of market estimations. The US Consumer Price index fell to 0.1% yesterday lower than some expectations and inflation is being contained despite more than 2.5 trillion dollars of quantitative easing being injected into the economy over the last five years. This news came as gold prices recovered to some degree having slipped drastically through the morning. Today ‘s main releases will be the Beige book this evening which will reveal the state of the local economies from all 12 Federal Reserve Banks. Despite it being a quiet day on the data front, two members of the Federal Open Market Committee will be speaking today so there is the potential for volatility in the market. Call in now for the latest update on the US dollar.
Elsewhere, the Japanese yen was the worst performing currency yesterday weakening significantly against its major counterparty on Tuesday in light of the central bank's announcement of unprecedented stimulus measures. The South African Rand strengthened for the first time in three days, bouncing back from its sharpest slip in months as metal prices rallied and investors sensed the currency's decline had bottomed out. The Canadian dollar recovered against its US counterpart following Mondays drop showing the largest fall in a year as gold losses dampened demand for commodity-linked currencies. The main news today will be the Bank of Canada’s interest rate decision which is widely expected to be kept on hold at 1%, furthermore, the monetary policy report that goes alongside this release will be watched closely by investors. Be in touch for movement in your currency at Smart now.
Posts
No comments:
Post a Comment