Traders continued to sell sterling yesterday, pushing the UK currency down to a five-month low against the dollar, eventually closing at 1.5797. The pound lost ground after an economics and business report forecast that sterling could fall as low as $1.40 against the dollar. The report found that interest rates in the UK were likely to remain at record lows for some time and would remain at just 2.0% until 2014, which would put the country’s yield well behind other major economies. Traders also continued to speculate that the Bank of England might increase the value of its quantitative easing policy beyond the current £175bn, in stark contrast to the prospect of similar special stimulus measures being wound down in other economies.
Posts Tagged ‘Bank Of England’
Sterling loses further ground to the dollar on specualtion of a further extension of QE
Posted by admin on October 13th, 2009
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Sterling relinquished strong gains vs euro yesterday as risk appetite eased
Posted by admin on October 1st, 2009
The British currency, unable to capitalise on strong early gains, lost ground against the euro yesterday, as an easing of risk appetite wore heavily on the fragile pound.Initially, sterling extended Tuesday’s rebound following a surprising jump in UK consumer sentiment, posting its biggest monthly boost in more than 14 years and signalling growing optimism about the UK economy. Additionally, the pound found support from signals that the Bank of England may not cut its bank reserves deposit rate anytime soon. In the afternoon however the pound gave up its gains, as weak US data brushed off on equity markets and sent the pound back down to a close of 1.0915.
Pound Tumbles, Dollar Surges as Risk Aversion Hits Currency Markets (Euro Open)
Posted by admin on September 28th, 2009
The US Dollar surged higher to start the trading week as stocks sold off across Asian exchanges, boosting demand for the safety-linked currency. The British Pound bore the brunt of the greenback’s assault as risk aversion compounded last week’s dovish rhetoric from the Bank of England.Key Overnight Developments• Pound Tumbles Despite BOE Backtracking on King’s Comments• Japanese Yen Surges on Safety Demand as Stocks Plunge in AsiaCritical LevelsThe British Pound and the Euro both suffered sharp losses in overnight trading as stocks tumbled in Asia, driven lower by Friday’s disappointing US economic data, sending the MSCI Asia Pacific regional benchmark index down 1.2% and boosting demand for the safety-linked US Dollar.Asia Session HighlightsThe British Pound raced sharply lower in early trading as currency markets seemingly concluded that the Bank of England suspiciously “protests too much” after the UK Times Online cited unnamed sources at the central bank as saying King was trying to talk down sterling last week.
Aussie hits new highs on sterling weakness and a rise in demand for higher-yielding currencies
Posted by admin on September 25th, 2009
Selling pressure on the pound and demand for higher-risk currencies saw the aussie advance to a fresh twenty-year high of 1.8464 against the pound. Remarks by Bank of England Governor Mervyn King to a regional newspaper published yesterday underscored the central bank’s lack of concern about the weakness of the pound, which sent the currency spiraling.The aussie received further support as investors shifted funds into higher-risk currencies after the US Fed bolstered expectations that interest rates would remain low for some time.Risk appetite was also encouraged after the G20 meeting, where a statement showed signs that that global stimulus measures would remain in place, buoying demand for the Australian dollar.
Sterling weakness drags it down below 1.60 following King’s comments
Posted by admin on September 25th, 2009
The pound slid 1.7% against the greenback yesterday as momentum to dump the pound snowballed following comments from King that lent his support to a weak currency. Sterling was at a two and a half month low against the dollar after comments from Mervyn King left FX markets in no doubt the Bank of England was comfortable with a weaker pound.A meeting set up between the BoE and London-based economists to clarify policy also worried investors who maintained their bearish sentiment toward the pound, pushing it lower.An easing of risk appetite added support to the dollar after data revealed a decline in US existing home sales from the previous month and undershooting forecasts.Additionally, as the US markets came online, equity markets took a turn into the red, which supported demand for the haven currency, and brought the price to a close of $1.6064.In trading this morning, sterling has tumbled to a four month low against the dollar as a break of the 1.60 level triggered a wave of stop loss sales.
The pound’s decline continues, as confidence in the currency is undermined
Posted by admin on September 25th, 2009
Sterling went into its steepest daily decline against the single currency in 5 months yesterday, losing 1.2%, after Mr. King revealed that he was content with the current value of the pound. Sterling hit its lowest euro price since early April, extending broad losses after Mervyn King said that a weak pound was supporting a necessary rebalancing of the UK economy.The euro was also supported by a further rise in business confidence in Germany. Although expectations for the Ifo economic survey were not matched in September’s report, the modest increase reflected optimistic future expectations for economic recovery.Demand was further eroded as the Daily Telegraph reported yesterday that the Bank of England was set to meet with economists in a “crisis” meeting designed to stem alarm and confusion over the QE program and the weakness of the pound.Additionally, once the pound broke below the 1.10 level, automatic sell off points were triggered, driving sterling down to a near six month low of 1.0922.The pound has slid further in trading this morning, losing another 0.5%, and currently trading around 1.0900.
The pound has failed to sustain yesterday’s rally against the aussie, plummeting over 2 cents so far this morning
Posted by admin on September 24th, 2009
The pound shot higher against the aussie yesterday after suspicions were quashed that the Bank of England may have recently considered further easing. Minutes from the latest MPC meeting revealed a more encouraging note upon the prospect of the UK economy, and signaled that currently no further extension of loose monetary policies were necessary, which supported demand for the pound.Additionally, the rise of recent risk appetite took a brief pause as traders awaited an interest rate decision from the Fed, which weakened demand for higher-yielding currencies.However, during Asian trading, the Tokyo’s Nikkei index rose 0.9% in its first day of trading following a three day holiday, which encouraged investor demand for the aussie, pushing it higher, and currently trading 0.7% up for the day.The aussie was also supported by a US statement that rates would remain low for some time, which buoyed investors to resume selling the US dollar in favour of higher-yielding currencies.
Pound was supported yesterday by the MPC minutes but has resumed its slide so far today
Posted by admin on September 24th, 2009
Sterling got a welcome reprieve from negative sentiment yesterday after BoE minutes revealed that there had been no discussion of cutting interest rates.The pound rallied sharply after the minutes of the Bank of England’s September monetary policy committee meeting calmed fears over a possible extension of its quantitative easing programme.The minutes showed a unanimous consensus to keep the Bank’s asset purchase plan at current levels and there was no discussion over a cut in the rate its pays on commercial bank deposits.The tone of the meeting was more encouraging than had been priced into the market, stating that “ growth in the second half of the year is likely to be positive,” returning demand for the pound.However, although the minutes did mention recent improvements in the economic and financial data, they did leave the door open to further policy loosening, which capped sterling’s rally.In trading today, the pound has plummeted nearly a cent, hitting a low below the 1.10 mark as decling stocks and another statment from Mervyn King weigh heavily on the pound’s prospects.
British Pound Volatility Threat High as Currency Markets Focus on BOE Minutes (Euro Open)
Posted by admin on September 23rd, 2009
The British Pound may be in for a volatile session ahead as the release of minutes from this month’s Bank of England monetary policy meeting top the economic calendar in European hours. Currency markets were active in overnight after New Zealand GDP unexpectedly expanded and the Chinese central bank deputy governor sounded off against the US Dollar.Key Overnight Developments• Currency Surges as New Zealand GDP Unexpectedly Grows in Second Quarter• USD Drops After PBOC’s Hu Says Dollar-Reserve System Must ChangeCritical LevelsThe Euro trended higher against the US Dollar in overnight trading, testing as high as 1.4842. The British Pound also advanced, adding as much as 0.4% against the greenback.
British Pound Selling Continues With Unemployment to Set 12-Year High (Euro Open)
Posted by admin on September 16th, 2009
The British Pound fell against the US Dollar in overnight trading ahead of a report that is set to show the unemployment rate hit a 12-year high of 5% in August. The Euro Zone Consumer Price Index and Swiss Retail Sales are also on tap.Key Overnight Developments• Australia Won’t Raise Interest Rates Until Next Year, Says Westpac• Euro Flat, British Pound Lower Against USD in Overnight TradingCritical LevelsThe Euro consolidated in a narrow range below the US session high at 1.4686 in overnight trading. The British Pound moved lower, slipping as much as -0.4% against the US Dollar.Asia Session HighlightsAustralia’s Westpac Leading Index added 1.1% in July, rising to the highest level in seven months.
GBP Anticipates Volatility before Rate Decision
Posted by admin on September 10th, 2009
With mixed results versus its primary currency counterparts, the British Pound appears to be consolidating many of its trends towards a volatile movement; positioned to take place today, it appears. The Bank of England’s rate decision and policy statement at 11:00 GMT may be today’s leading news event and forex traders won’t want to miss out on the volatility which is sure to follow this release.USD – USD Down 3.7% against the EUR this YearThe Dollar Index traded near the weakest level in almost a year against the currencies of six major U.S.
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British Pound Takes Center Stage as Bank of England Announces Interest Rates (Euro Open)
Posted by admin on September 10th, 2009
The British Pound is in European trading hours as currency markets turn their attention to the interest rate decision from the Bank of England. An actual change in borrowing costs is unlikely, with traders paying keen interest to anything that hints at the future course of the bank’s quantitative easing program.Key Overnight Developments• Japanese Corporate Goods Prices Disappoint, Signal Continued Deflation• Australian Jobs Report Disappoints, Weighs on RBA Rate Hike ExpectationsCritical LevelsThe Euro moved slightly higher in overnight trading, adding 0.1% against the US Dollar. The British Pound followed suit, testing as high as 1.6563 against the greenback.Asia Session HighlightsJapan’s Domestic Corporate Goods Price Index printed flat in August, showing producer prices continued to shrink at a record annualized rate of -8.5%.
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