Sterling
It just shows how things can change so quickly. After a steady week sterling lost over a cent against the euro and the US dollar late Friday as it was announced that Fitch joined Moody's downgraded UK government debt in stripping the UK of AAA status based on the weak economic environment. Further rapid movements can be expected this week as we await Thursdays announcement of UK growth figures for the first quarter of this year. The median forecast is for slight growth of 0.1% - narrowly avoiding the ominous triple-dip recession; however, the overall consensus is far from clear and analysts remain split as to whether or not the UK will officially fall back into recession. Any deviation from the 0.1% increase will undoubtedly affect sterling's value. Call in now for the latest news and an up to the second quote.
The euro advanced against sterling on Friday amid speculation that the European Central Bank will take additional measures to support the monetary union, though buoyant attitudes seem perpetually diluted by the prospect of economic and political instability in the medium-term. As commercial banks in the Eurozone look to repay almost eleven billion Euros of the Long-Term Refinancing Operation this week, the weak forecast for private sector lending may encourage the ECB to drop interest rates to record lows amid another quantitative easing cycle as growth and inflation prospects remain depressed. Ahead of the ECB rate decision on 2nd May we should see more fluctuation in the euro’s fortunes as officials maintain a reactionary approach to addressing risks inherent in the region. Manufacturing and Services PMI data released this week will be watched closely as key indicators of how well the Eurozone is performing as a whole. Call in now for the latest update on the markets.
The US dollar held a fairly constant trajectory just before the weekend, whilst seeing significant gains against sterling. There are a number of interesting pieces of data coming out of the US this week. Today and tomorrow we will see the release of home sales data, a leading indicator of economic health, the outcome of which will be reflected in the market. Later on in the week we have durable goods, unemployment, and GDP data released on Wednesday, Thursday and Friday respectively. All data will be influential on the market so call in now for up-to-the-minute rates.
Elsewhere, the Japanese yen weakened over the weekend - nearing the 100 per dollar level not seen since 2009 after the Bank of Japan's monetary policy stimulus policies went unopposed throughout the G20 meetings. Japan's currency dropped in most of its major pairs, with traders expecting further decreases in value against the US dollar and euro. The South pacific nations' currencies rebounded from weekly losses however as monetary stimulus from the US to Japan increased demand for higher-yielding assets, with the Australian and New Zealand dollars both finding demand following the recent drop in gold prices. Central bank and inflation figures this week from both regions will be pivotal for how they are set to perform in the second quarter. Call in now for live rates and an update on the latest global developments.
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