Sterling
Having enjoyed a successful last few days, sterling traded slightly higher against the US dollar and slightly lower against the euro in what was a quiet start to the week for currency markets. There have been increasing signs that the British economy is recovering – not least due to rising house prices and positive data from the manufacturing, construction and service sectors. Investors will be looking to UK manufacturing production data emerging this afternoon to influence the market further, whereby more positive news will add to speculation that the UK's asset purchase programme could be reduced this year or at least not expanded further as Mark Carney takes over at the Bank of England. Talk to your trader now for all your currency requirements and reaction from the markets.
The euro performed well on Monday, regaining earlier losses against the US dollar as trade was largely confined to a tight range. European Central Bank leaders are still promising a modest recovery as the year progresses, though with on-going economic struggles the prospect of furthering the region's quantitative easing programme remains a possibility despite the French Prime Minister declaring the crisis to be over when speaking in Japan yesterday. Furthermore, as peripheral countries attempt to find purchase on a sustainable recovery, the ECB has not ruled out its willingness to impose negative interest rates if warranted. The German Federal Constitutional Court rules on the central bank's Outright Monetary Transactions policy over the next two days, with potentially serious consequences for the political stability of the union; call in as the week progresses for up-to-the-minutes prices on your transaction.
General US dollar strength early on Monday was aided by rating agency Standard and Poor's upgrading the country's AA+ credit rating from negative to stable based on receding fiscal risks. A string of positive data recently has boosted the dollar's performance as the world's largest economy begins to take more significant steps towards economic recovery. One of the members of the Federal Open Market Committee suggested that the country's asset purchase facility would not be tapered back in the near future despite positive labour market data last week, pointing out that relatively low inflation data means that any tapering of the programme may be significantly delayed. How this new clarity from central bank members impacts the markets ahead of the interest-rate meeting taking place next week remains to be seen, with little significant data emanating from the US today. Call Smart now for up to date information and to see how the market reacts.
Worldwide
Elsewhere, poor Chinese data released over the weekend has pointed to further slowdown in the world's second largest economy as export growth stalled and imports fell. Industrial production is decelerating and with worse than expected retail sales activity, some predict the central bank may move to cut interest rates. India meanwhile is looking to encourage investors' interest in their sovereign debt by relaxing permit laws, though analysts argue that the government must take action soon with monetary and fiscal policy to aid the stuttering economy. The rupee fell in value sharply against both sterling and especially the US dollar where it reached record lows yesterday as the country battles with slowing growth figures, political instability and dwindling public finances. It was better news however for the Canadian dollar which forged ahead across the board after positive labour data before the weekend as new home building accelerated by the most in over a year. The Bank of Japan's monetary policy news will affect prices coming through this morning: call in for the latest developments with Smart.
Posts
No comments:
Post a Comment