Sterling
Sterling experienced a fairly steady day on Friday in the absence of any real data of note being released. Looking ahead to this week, all eyes will be on Thursday as the Bank of England will meet for the second time with Mark Carney as the new Governor. Last week there was increased speculation that we could see a possible change of stance with regards to monetary policy so traders will be watching even more closely than usual. The markets will likely be nervous in the run up to the release and then we could see big moves once the Monetary Policy Committee have announced any changes or lack there of. Further commitment to keeping interest rates at 0.5% or any increased likelihood of an increase in asset-purchasing will likely cause sterling to depreciate sharply. Manufacturing Purchasing Managers Index (PMI) data is also released on Thursday before the announcement from the Bank of England so could create increased volatility first thing . We have seen moderate growth in the manufacturing sector during the last two months, however recovery has been far from convincing and this data will have an effect on faith in a sterling recovery. Finally, Construction Purchasing Managers Index figures will be released on Friday and have a similar capacity to affect performance. Call in now to see how market chatter affects the pound ahead of key releases on Thursday.
The euro ended last week on a high, holding the gains it had achieved against its main trading partners earlier in the week. The euro's performance on Friday was unaffected by slightly lower-than-forecast German import price data which showed that prices had fallen by 0.8% from May to June. Following some slightly more positive data emanating from Europe last week which caused the euro to gather a head of steam, the general sentiment is a tentative growth of confidence in the market but it will be looking towards the the European Central Bank's (ECB) monthly decision on monetary policy on Thursday. Before then, we have unemployment data out of Germany, and manufacturing data out of Spain and Italy. Call in for news and live rates on the euro.
US dollar
The US dollar traded in a fairly narrow range on Friday in absence of any significant market release. Revised Consumer Sentiment figures came in marginally better than expected, but had only caused slight variation for the dollar. We have a raft of employment data released this week with the the headline release being the non-farm payrolls data released on Friday which has caused a great deal of volatility in the past - especially in light of the Federal Banks rhetoric that monetary policy will stay loose until the labour market shows significant improvement. This rhetoric will be scrutinised to a greater extent when the Federal Open Market Committee (FOMC) meet on Wednesday. Traders hope that the FOMC statement could well give greater clarity as to when the tapering of its asset purchasing program may begin. Advance second quarter GDP figures, which also come out on Wednesday, are estimated to show growth of 1.1% although some key figures have expressed more pessimistic views following the inconsistent run of economic data that we have seen from the US recently. Other data released this week includes figures showing the number of homes pending sale, consumer sentiment statistics and manufacturing PMI. An extremely busy week for the US, so call your trader now to see if the dollar can start to make up some of the ground it has lost.
Elsewhere, Friday saw the Japanese yen end a seesaw week on a high, as a drop in Asian stock market confidence boosted demand for the safe haven currency.. The Australian, New Zealand and Canadian dollars all performed well as traders bet that the Federal Bank will not tighten monetary policy at its meeting this week. Tonight we will hear statements from the governors of both the Bank of Japan and the Bank of Canada and building approvals data from Australia which could well cause significant market movements in the market for the respective currencies.. Other data this week includes business confidence figures from New Zealand, inflation data out of Australia and monthly GDP data out of Canada which is expected to show growth of 0.2% . Get in touch for the latest rates.
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