Good Morning. The pound had a torrid run last week, with rates steadily falling. Sterling fell further this morninig, hitting its lowest level in almost five months against the dollar on the view that UK interest rates will remain low and that the outlook for the British public finances remains bleak. Rates @ 08:30am are as follows:
- GBP/EUR 1.0719
- GBP/USD 1.5749
- GBP/AUD 1.7508
- GBP/NZD 2.1652
- GBP/CAD 1.6426
- GBP/JPY 142.30
- GBP/ZAR 11.730
Pound falls further
Sterling fell on Friday, hurt by a broadly firmer dollar after comments by U.S. Federal Reserve Chairman Ben Bernanke seen by market players as hawkish.
Those with Euros to sell have benefited by a week long run of poor UK data, bringing rates to the best they have been for around 5 to 6 months:
As you can see from the chart, rates have continued their downward trend after poor UK data outweighed the positive news.
Data on Friday showing UK output prices surprisingly turned positive and a slight narrowing in the trade deficit also failed to turn around the pound. Sterling was a big loser against the dollar because of expectations Britain will be among the last major countries to withdraw its extremely easy monetary policy due to its poor economic performance.
"Sterling remains most vulnerable against the dollar's rise in the recent turn in global sentiment" spurred by the market's reaction to Bernanke's comments, said Ian Stannard, currency strategist at BNP Paribas.
Sterling had actually risen on Thursday after the BoE maintained its 175 billion pound asset buying programme and kept interest rates at a record low of 0.5 percent, as expected.
The focus is on the November meeting when the central bank will have new economic forecasts. Most analysts do not expect any change in policy although a sizeable minority still see a further expansion of the quantitative easing programme.
Security
An interesting article in the times this weekend, that talks about the security of using a currency broker. The Foremost Currency Group are pleased to announce that the Financial Services Authority (FSA) have confirmed by letter that they are 'minded to grant' the company authorisation to carry on payment services activities.
We are now authorised and compliant with the new FSA Payment Services Directive, which comes into effect on 1 November 2009. See our confirmation here.
Ø Our key personnel have been vetted by the FSA and have been judged fit to practice.
Ø The financial integrity of the business has been tested and proven to be healthy.
Ø We participate in the Financial Ombudsman service for clients’ protection.
Ø We keep all client funds in segregated Client accounts with Barclays Bank plc, separate from the rest of the business’ capital.
Ø We are also registered for Money Services Regulation by HM Revenue and Customs.
This Weeks Data
With the pound very weak, data releases will have a big impact on Sterling's movements. With Sterling under lots of pressure, and negative economic figures will keep exchange rates low. Any positive releases that may signal that the UK is recovering from recession, and we could see rates recover.
Today is fairly quiet, as it's a US Bank holiday, but there is some house price data for the UK, along with retail sales. Wednesday is the most important for UK data, when the unemployment and jobless data for the UK will be released.
For the EU we have industrial production, Consumer Price Index, and we'll also look to thursdays ECB monthly report that contains a detailed analysis of the prevailing economic situation and the risks to price stability. It also provides articles on a wide range of topics related to the tasks of the ECB.
For the US we have the FOMC minutes on Wednesday which determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. On the same day we will see retail sales and import prices. Also look to jobless data for the US on Thursday.
Elsewhere, there is an interest rate decision for Japan, and for Australia there is a speech by the governor where he gives a press conference as to how the RBA observes the current Australian economy and the value of AUD. His comments may determine a short-term positive or negative trend.
Monday
Ger - Wholesale Price Index
NZ - Retail Sales
UK - RICS House Prices
UK - BRC Retail Sales
Tuesday
Aus - NAB Business Confidence
UK - Consumer Price Index
UK - Retail Price Index
UK - DCLG House Price Index
US - Consumer Confidence
Wednesday
Jap - Interest Rate Decision
UK - Average Earnings
UK - Unemployment & Jobless Claims
UK - Retail Price Index
EU - Industrial Production
US - Import Prices
US - Retail Sales
US - FOMC Minutes
NZ - Consumer Price Index
Aus - RBA Speech
Thursday
EU - ECB Monthly Report
EU - Consumer Price Index
US - Consumer Price Index
US - Jobless Claims
Friday
EU - Trade Balance
Can - Consumer Price Index
US - Industrial Production
When you get in touch, ensure you mention you heard about foremost currency group through our Blog. Simply quote 'Blog'
Open a free Trading Facility
Open an online Trading Account
Email Me
