In an uncertain day for the UK economy, the pound lost as much as 2.0% to the euro on Friday, sharply reversing its recent rally to close down at 1.0862. Data revealed that the UK economy unexpectedly contracted by 0.4% between July and September this year, confirming that the UK is still in recession. Quarterly growth of 0.2% had been expected, although expectations had been tempered by recent figures showing no growth in retail sales in September and a 2.5% decline in industrial output in August. Importantly, the disappointing GDP figures may now lead the Bank of England to consider the possibility of extending their asset purchase scheme in their November meeting in order to sustain the evidently fragile recovery.
Posts Tagged ‘Bank Of England’
UK economy contracted by 0.4%, which has and will continue to weigh heavily on sterling
Posted by admin on October 26th, 2009
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UK GDP contracts by 0.4% – pound dives
Posted by admin on October 23rd, 2009
Data this morning has run significantly against market expectations, confirming that Britain is still in a recession. The UK’s third quarter GDP figure was revealed to be a 0.4% contraction, which now means that the UK has suffered 6 consecutive quarters of negative growth. Market participants had speculated that the UK economy would grow by 0.2% in the months from July to September and had taken the pound slightly higher this morning. There has been data recently though that points to this disappointing figure. Data in early Ocotber revealed that manufacturing production had fallen by 1.9%, significantly below forecast and this has clearly weighed heavily on overall output.
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Pound continued to climb against the aussie yesterday as confidence in the UK economy improved
Posted by admin on October 22nd, 2009
A broadly stronger pound hit a two-week high against the aussie, briefly rising over 1.8000, as confidence in the UK economy gained momentum.Sterling jumped following the minutes from the Bank of England’s latest policy meeting, which dampened expectations of an extension to quantitative easing. The minutes appeared to move the balance of market expectations to the possibility of a pause of the government’s asset purchase scheme in November, reversing recent speculation. In addition, the aussie dollar found its strength undermined as commodity prices, most notably oil, turned lower, discouraging investors from the higher-yielding currency.
Sterling made substantial ground on the dollar yesterday as the BoE showed no sign of loosening montary policy further
Posted by admin on October 22nd, 2009
Dollar selling in the market was stepped up with investors moving into the pound as the MPC minutes proved more positive than expected. The pound climbed over 1.66, posting a two and half cent gain against the dollar as the minutes from the Bank of England’s October monetary policy meeting struck a less dovish tone than recent comments suggested. Analysts said the most important story within the release was the fact that in the September meeting, governor Mervyn King thought an expansion of the central bank’s quantitative easing programme could be justified. But there was no mention of that in this latest meeting.
Bank of England voted unanimously to maintain the key rate
Posted by admin on October 21st, 2009
Wednesday, 21 October, the Bank of England published the minutes of the meeting held on October 7-8, at which the Committee on monetary policy has kept the rate of compulsory reserves of commercial banks at 0.50%. The decision was taken unanimously. At the same meeting it was decided to continue the program to acquire the assets of the private sector by the central bank reserves amounting to 175 billion pounds.Based on the evaluation of the program to buy assets on the financial markets, the Committee of the Bank of England expects that this program in conjunction with other factors, including timely reduction of the key rate, government intervention to stabilize the banking system, the restoration of the world economy and increased confidence, has led to significant improvements.
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Dollar “bulls” and “bears” met at the border
Posted by admin on October 21st, 2009
Although published in the previous session, quarterly reports were once again better than forecasts, the markets have decided instead to beat the American statistics, which do not meet the expectations that led to a strengthening dollar and a slight correction on Wall Street. The number began construction in the U.S. over the next period increased slightly (590 thousand against 587 thousand the previous figure and the forecast 610 thousand), while building permits dropped from 580 thousand to 573 thousand (estimated 595 thousand)On the recovery of the dollar against the euro / dollar rolled away from the level of 1,50, and not felt it.
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Pound slid back against the euro yesterday, but has rebounded strongly in trading today
Posted by admin on October 21st, 2009
Sterling dipped slightly against the single currency, relinquishing gains in the afternoon as US equities slipped back, closing the day down just 0.1% at 1.0958. In early trading, investors picked up on comments from the ECB President who added to remarks from other eurozone officials expressing worries about the strength of the single currency. In response the markets took the euro slightly lower, enabling the pound to reach up over 1.10, near Monday’s 3-week high. In addition, the pound gained slight support after the UK public spending deficit in September fell short of market expectations, buoying investor sentiment.
The British pound traded with a positive attitude
Posted by admin on October 21st, 2009
The British pound traded with a positive attitude and has already reached sessional maximum near $ 1.6430 – support the currency has a general weakening of the U.S. dollar, as well as the comments of the Bank of England Governor Mervyn King that “at some point, interest rates return to normal levels. King also noted that now rates are at extremely low levels, and is not yet known how long this situation will persist. Now couple pound / dollar was at $ 1.6429 otmekte – Offer near the level of $ 1.6425 until restrain upward movement pair.
Pound reached over $1.64 yesterday, but has slipped half a cent in trading this morning
Posted by admin on October 20th, 2009
Having traded in the red during the morning session, the pound rebounded back over $1.64, climbing for the fifth consecutive day and reaching a near one-month high of $1.6422. The pound initially fell against the dollar, relinquishing last week’s gains after the Sunday Times said Bank of England policy maker Adam Posen may support an extension of the central bank’s asset-purchase programme. Posen added that he was “not worried about overshooting inflation right now,” which many analysts have said will become an issue as the economy begins to grow. Last week, following the words of Mr Fisher, the market moved to discount a scenario where it was more likely that asset purchases would be paused.
Sterling traded strongly at the end of last week against the kiwi but has slipped back sharply this morning
Posted by admin on October 19th, 2009
Sterling managed to close last week at a near two-week high of 2.2056 against kiwi, as the UK currency continued to build on support from a BoE official. The ailing pound managed to build on Thursday’s gains, rallying a further 1.2% against the kiwi on Friday, in the wake of a Bank of England policy maker signaling satisfaction with the impact of the central bank’s quantitative-easing strategy. Investors took the opportunity to take strong profits that had been built up earlier last week, taking the sterling / kiwi price back over 2.20.
Today Asia behaved more discreetly
Posted by admin on October 16th, 2009
Asia today is to behave more calmly. Does this mean that in the near future growth in the market will stop? The British pound, do not abandon the ranks of losers for many weeks, last night suddenly plucked up courage and flew up. On the technical side movement helped triggered stop-loss, but with a fundamental – a more confident tone of a member of the Bank of England Fischer in an interview with “Financial Times” and talk of mergers and acquisitions involving British companies. Sharp depreciation of the euro / pound gave further impetus to the movement, and the pound managed to win back some lost over the last three weeks of positions.With regard to the dynamics of the dollar, then that session was ambiguous, since the results of two studies of business activity in the U.S.
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Broad dollar weakness and an increase in demand for sterling has pushed the price back near $1.63
Posted by admin on October 16th, 2009
Sterling achieved a three-week high of 1.6297 against the dollar yesterday, supported by upbeat comments about the UK economy. The pound jumped nearly three cents, or 1.8%, against the dollar on speculation that policy makers will pause their asset-purchase programme next month as the economy shows signs of recovering from the recession. The Financial Times cited Bank of England Markets Director Paul Fisher as saying that the asset purchases scheme may be paused to give the central bank the option “of doing more later.” Analysts suggested that it appeared that the Bank of England was letting it be known in more forceful terms that it is not talking the pound down any longer.
Sterling has rallied strongly against the euro, pushing up over 1.09
Posted by admin on October 16th, 2009
Sterling strengthened as much as 2.2% to a ten-day high of 1.0936 against the euro yesterday, its biggest intra-day gain since Jan 30th.Sterling was able to post strong gains following bullish comments from a Bank of England policymaker who stated that quantitative easing is in fact working. MPC member Paul Fisher told the Financial Times he felt confident that the bank’s asset purchase programme was ‘having the scale and speed of impact that we would have hoped for when we started,’ back in March. Analysts said that the comments were perceived as lessening the chances that the central bank would expand its loose monetary policy at their next meeting in November, which to some extent, had already been priced into the market.
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The kiwi dollar continues to climb as expectations of a rate rise strenghten
Posted by admin on October 14th, 2009
Once again sterling edged downward against the kiwi yesterday, though it picked itself up significantly from an intra-day low below 2.13, to close at 2.1534. The pound dropped in early trading after a business group said the Bank of England should expand its asset-purchase programme and the inflation rate slowed more than forecast. UK annual consumer price inflation slumped to its weakest rate in seven years in September, underlining the likelihood that the Bank of England will need to maintain loose policy for an extended period.However, investors took the opportunity to cash in profits in the afternoon, buying back into the pound, enabling the sterling price to rally.
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Sterling is currently trading higher against the aussie following upbeat comments and a move to cash profits
Sterling recovered some of its recent extensive losses against the aussie dollar yesterday, climbing over two cents, to close up at 1.7668. Bank of England member, Paul Fisher, said yesterday that policy makers would be more likely to pause asset purchases in their upcoming meeting in November, giving themselves the option of “doing more later,” rather than stopping them. His comments were taken to read that the MPC is unlikely to extend their quantitative easing programme, supporting a slight rise in confidence in the UK economy, strengthening the pound. In broad terms, the aussie traded strongly against most currencies yesterday as positive economic data in the US led to investors adding to their long positions in the higher-yielding currency.
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