Good morning. The pound fell against most currencies yesterday after poor PMI data. This morning poor housing data has also pushed Sterling lower, as fears grow the UK economic recovery is running out of steam. At 08:30am this morning rates are as follows:
- GBP/EUR 1.2027
- GBP/USD 1.5389
- GBP/AUD 1.6957
- GBP/NZD 2.1551
- GBP/CAD 1.6189
- GBP/CHF 1.5593
- GBP/ZAR 11.186
- GBP/HKD 11.965
- GBP/NOK 9.5055
- GBP/JPY 129.48
- EUR/USD 1.2793
Poor Housing data knocks the pound
British house prices fell much faster than expected last month but further declines are likely to be modest, mortgage lender Nationwide said this morning. The housing market data is a good leading indicator and points to a slowdown on the UK economy, and so Sterling has suffered this morning as a result.
PMI Data also pushes Sterling lower
A UK purchasing managers' survey came in sharply lower than expectations on Wednesday, raising concerns the UK economy could struggle in the coming months, dampening recovery hopes which had been fuelled by an upward revision to UK growth the previous week.
Interest Rates for the EU today
Today the EU will announce their Interest rate decision, as they always do on the first Thursday in the month. The Bank of England announce their decision next Thursday.
The group led by Jean-Claude Trichet will discuss interest rates in the euro area and the recovery. The sentiment around the markets seems to be that the global recovery is going to be decoupled. Depending on the committee's take on these issues they will provide an answer to the question of how long the ECB is going to keep historically low rates and pumping fresh currency into the economy.
We expect rates to be left on hold, but if there were to be a hike, expect GBP/EUR to drop significantly. The rate decision is at 12:45pm today. More importantly we will be watching the comments in the press conference 45 minutes later, where comments often move the currency markets depending whether they are positive or negative.
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Labels: EU Interest Rates, PMI, UK Housing Data