The pound edged higher, achieving its biggest weekly advance against the euro since January, as signs pointed to the UK economic recovery talking hold.

• The pound/euro pairing was little changed at the end of last week, though sterling did creep up, supported by reports showing gains in consumer confidence and UK house prices.
• Month-on-month property prices were up for the sixth consecutive month in October and were 2% higher than in the same month the previous year. However, the pace of monthly price rises has eased, going up by just 0.4%.
• Meanwhile in the eurozone, data revealed that the unemployment rate rose to 9.7%, in line with market expectations, which raised concerns that recovery could still be destabilised, dulling demand for the euro.
• Last week the Bank of England completed its £175 billion asset purchase programme and so investors are now looking toward an extension of QE in their meeting this week.
• Analysts have noted that until the market is confident the BOE is done with quantitative easing, it is going to be very difficult for sterling to rally significantly from current levels.

Related posts:

1. The euro posted gains against the US dollar on Friday and has reached back over 1.46 this morning
2. Pound advanced against a broadly weaker euro yesterday, but has stumbled in trading this morning
3. Pound edged higher against the euro yesterday and has consolidated its position this morning

The pound continued to advance against a broadly weaker single currency yesterday, hitting a six-week high of 1.1167 as investors trimmed their euro holdings.

• Preliminary CPI data from Germany revealed that consumer prices remained flat on the year in October. Monthly data showed that the index did rise by 0.1% in October from September, though this rise failed to garner support for the euro.
• The markets also saw a slight withdrawal of risk activity yesterday as weak housing data in the US renewed concern over the health of the global recovery.
• The data dragged European equities down to three-week lows, which appeared to impact more severely on the single-currency, enabling the pound to gain.
• This morning, the pound is consolidating its position above 1.1100, with analysts reiterating that sterling is likely to remain in a holding pattern until next week’s BoE asset purchase decision.
• Investors are cautious amid uncertainty over whether the Central Bank will extend their quantitative easing programme, and so sterling movements may continue to be dictated by risk appetite in over the coming days.

Related posts:

1. Selling pressure held firm on the pound yesterday, with the euro price falling below €1.08
2. Weak equities undermined the aussie’s upward trend yesterday allowing the pound to post marginal gains
3. Bearish sentiment towards the pound prevailed yesterday, but the sterling is rallying strongly against the euro today

After an unsteady early session, the pound rebounded strongly from Friday’s sell off, to close 1.1% up.

• The pound recovered steadily through the day after data revealed that the German Gfk consumer sentiment indicator dropped to 4.0 from 4.2 in October, weaker than the median forecast of 4.5, dulling demand for the single currency.
• In addition UK business confidence rose to the highest in 18 months, according to a third-quarter survey, with 19% of executives polled saying the outlook for business is “good” or “very good,” up from 9% in the previous quarter, which stoked demand for the pound.
• Analysts hypothesised that the pound may be considerably oversold at its current value, which does present a good opportunity for British businesses.
• Analysts also noted two opposing arguments developing: the first is a widely held view that based on better PMI survey data there is a good chance that GDP data for Q3 will be revised up.
• The second is the growing certainty that the BoE will announce a step up in QE at next Thursday’s policy meeting. The offsetting nature of these views may contain volatility in the approach to the November 5 th policy meeting.

Related posts:

1. Pound slid back against the euro yesterday, but has rebounded strongly in trading today
2. Bearish sentiment towards the pound prevailed yesterday, but the sterling is rallying strongly against the euro today
3. The pound posted a one cent gain against the euro yesterday, buoyed by the MPC minutes

The pound was broadly sold on Friday following a weak GDP figure, losing three cents to the kiwi dollar, to close back down at 2.1607.

• Data revealed that Britain’s economy has now shrunk for six quarters after it contracted by 0.4% in the most recent quarter, the longest period of contraction since records began in 1955.
• Analysts have now renewed their discussion over the possibility of the Bank of England retaining, or even extending, its £175 billion QE programme, which would compound sterling’s weakness.
• The news also confirmed that the BoE are likely to keep the benchmark interest rate at a record low of 0.5% firmly into 2010, lessening the appeal of sterling assets.
• In response, the markets took the kiwi nearer its multi-year highs hit earlier this month, and this trend has continued in trading this morning as investors continue to take their lead from Friday’s data.

Related posts:

1. Sterling fell back significantly against the dollar on Friday, as GDP figure disappoints the market
2. Sterling traded strongly at the end of last week against the kiwi but has slipped back sharply this morning
3. Sterling has resumed its recent upward trend against the kiwi, buoyed by brief market selling in high-yielders and by the MPC minutes

Having given up ground to the UK currency in early trading, the kiwi rallied steadily through the afternoon, to close marginally up at 2.1833.

• The pound found support yesterday after the BoE’s policy minutes revealed no direct discussion over further loosening the current monetary policy.
• In the wake of the news, sterling posted an intra-day high of 2.2074 as investors grew more confident in the outlook for the UK economy.
• However, the New Zealand dollar capped its losses as Alan Bollard, governor of the Reserve Bank of New Zealand, in a speech appeared surprisingly reserved over the recent appreciation of the kiwi dollar.
• Mr Bollard said that kiwi strength was “not necessarily an obstacle to raising the cash rate,” encouraging investment in the higher-yield currency.
• In trading this morning, the New Zealand dollar has weakened, enabling the pound to advance back towards 2.20, as Chinese data failed to do more than meet market forecasts, giving traders a reason to cash profits.

Related posts:

1. Positive economic data from NZ, keeps the kiwi rallying higher vs sterling
2. Positive data from NZ keeps the kiwi advancing against the pound
3. Kiwi halted its climb yesterday, as demand for higher-yeilding currencies weakened

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.
• Additionally, the pound was given further support after Mr King said in an opinion piece in Scotland’s Herald newspaper that, “it would be wise to take account” of the prospect of higher interest rates, heightening confidence in the UK economy.
• The dollar is up slightly in morning trading as a raft of Chinese data, though positive, failed to offer any major surprises, gaining in line with market expectations.

Related posts:

1. Sterling loses further ground to the dollar on specualtion of a further extension of QE
2. Pound was supported yesterday by the MPC minutes but has resumed its slide so far today
3. The pound posted a one cent gain against the euro yesterday, buoyed by the MPC minutes

Sterling reached a one-month high against the single currency, rallying strongly as the BoE’s latest policy meeting made no mention of further QE.

• The MPC minutes gave substantial support to the pound, which advanced 1.1% to reach a high of 1.1112, after they sounded a more positive tone than recent statements from policymakers suggested.
• It was revealed that the nine member committee had voted unanimously to leave the size of its asset purchase scheme unchanged at £175 billion, as had been widely expected, and made no direct reference to extending QE in the future.
• This perhaps suggests that the more positive macro news flow and the strength in asset prices may be moving the committee towards favouring a pause in quantitative easing at their November meeting.
• Later in the day, the pound capped its gains, consolidating below 1.11, with investors now awaiting retail data released today at 09:30BST.
• In addition, analysts noted that the eagerly awaited GDP figure on Friday could call a sharp halt to sterling’s recent rally should it fail to meet expectations of a 0.1% growth rate.

Related posts:

1. Pound was supported yesterday by the MPC minutes but has resumed its slide so far today
2. Pound reached over $1.64 yesterday, but has slipped half a cent in trading this morning
3. Pound slid back against the euro yesterday, but has rebounded strongly in trading today

Sterling suffered early losses against the euro yesterday after a BoE member hinted that the QE programme should be extended, but the pound recovered to close the day on level footing.

• Adam Posen stated that the central bank should continue its quantitative easing programme as the financial system has yet to show signs of a sustained recovery.
• He added that he was unconcerned about the possibility of further monetary stimulus risking a rise in inflation.
• His comments appeared to eclipse positive house price data from property website Rightmove, which showed that asking prices for homes in England and Wales were up on an annual basis for the first time in more than a year in October.
• Posen’s dovish remarks contrast with those of fellow MPC member, Paul Fisher, who last week suggested that the BoE may be considering drawing its QE programme to a close.
• However, the UK currency rallied strongly in the afternoon, buoyed by surging equity markets, which took their lead from positive US corporate earnings.

Related posts:

1. Sterling continued to rally at the end of last week, but has relinquished gains in trading this morning
2. Sterling traded strongly at the end of last week against the kiwi but has slipped back sharply this morning
3. Selling pressure held firm on the pound yesterday, with the euro price falling below €1.08

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.
• However, analysts warned that the fundamentals for the pound are still negative, with interest rate differentials favoring high-yielding currencies.
• This week’s minutes of the Bank of England meeting may also reinforce the fragile nature of the economic recovery, and the likelihood of rates remaining at this low level for some time.
• Indeed in trading this morning, the pound has relinquished much of the ground it had recovered, already two cents down on the day as confidence remains high in the New Zealand economy.

Related posts:

1. Sterling fell just 0.03% against the kiwi yesterday, but has suffered in trading this morning
2. Sterling continued to rally at the end of last week, but has relinquished gains in trading this morning
3. Sterling made gains against the kiwi yesterday, but rising risk appetite has supported kiwi advances today

Sterling maintained its rally as investors continued to lock in profits ahead of the weekend, with the price closing the day at 1.7839.

• Having climbed to multi-year highs against the pound earlier last week, positive comments from members of the BoE concerning the quantitative easing programme triggered an opportunity amongst investors to take profit, driving the price higher.
• Comments on Friday were made that stated the asset purchase scheme is having its desired effect on the UK economy, dulling concerns about the possibility of a further expansion.
• There was also a slight pull back in demand for the higher-yielding aussie following a weak earnings report from the Bank of America, which gave investors further cause to cash profits.
• This morning, traders have resumed aussie buying, with analysts noting that despite some disappointing US corporate earnings, the market remains positive and high-yielders are still on a rising trend.

Related posts:

1. Pound is rallying against the kiwi dollar as investors book profits ahead of the weekend
2. Bearish sentiment towards the pound on Friday allowed the kiwi to make substantial gains
3. Strong commodity prices and doubts over the UK economy allow the aussie to gain further ground

Sterling’s rally against the euro persisted on Friday, albeit with slightly less momentum, with the price closing the week at 1.0971, up 0.8% on the day.

• Sterling’s volatile run continued with a modest climb at the end of last week, as investors squeezed what more they could out of a rally that is expected to fade.
• Comments from BoE member Paul Fisher breathed some life into the pound, which has come under heavy pressure in recent weeks, when he stated that the quantitative easing programme is having its desired effect.
• His remarks built on those of Charles Bean earlier in the week and were seen as a departure from the Bank’s hitherto-drab assessments of the UK recovery and relaxed opinion of sterling’s decline.
• Investors reacted positively to the words, feeling that they may have been too quick to price in a further extension of QE into the market.
• In trading this morning however, sterling has slipped back, currently hovering just above 1.09, as investors resume selling the UK currency after another BoE member this time spoke of the need to continue the asset purchase programme.

Related posts:

1. Sterling continued to slide vs the euro on the run up to the weekend, but has capped its losses this morning
2. The euro made ground against the dollar on Friday, but has relinquished its gains this morning
3. Sterling relinquished strong gains vs euro yesterday as risk appetite eased

The pound reversed a three-day slide against the aussie, posting gains of nearly a cent as investors took an opportunity to lock in profits.

• During the morning session, the pound continued to push multi-year lows, hitting a price of 1.7333, as weak inflation data reinforced concerns over the strength of the UK economic recovery.
• UK consumer prices fell to a five-year low of 1.1% in September, dipping below the market’s estimate of 1.3%, due in part to lower utility bills and food prices.
• In addition, demand for the aussie remained strong as traders continued to favour gold over the US dollar, pushing the price to an all-time high.
• However, the pound made a comeback in later trading, rallying nearly two cents off record lows, as investors booked in profits.
• The pound was also supported by some upbeat comments from the BoE Deputy Governor, who stated that earlier fears of UK recovery were unfounded.

Related posts:

1. Weak US data sapped demand for the aussie yesterday, enabling the pound to gain
2. The pound has reversed recent losses against the aussie, supported by rising risk aversion
3. Stong servies data and rallying equities were unable to buoy a weak pound yesterday, enabling the dollar to creep up

Having made early losses, the pound recovered ground in afternoon trading following positive comments from the BoE Deputy Governor, Charles Bean.

• The pound initially fell against the dollar after consumer prices last month rose 1.1%, down from 1.6% in August according to the Office for National Statistics, which was below the 1.3% prediction.
• Prime Minister Gordon Brown also said that government had to ensure that the recovery is not going to be derailed, suggesting that stimulus measures would not be removed anytime soon.
• However, in the afternoon, the pound rebounded strongly, following the words of Deputy Governor Bean who stated in a speech that the British economy has hit rock bottom and the worst fears of earlier in the year are unfounded.
• In addition there was a substantial return to dollar selling in the market, spurred by persistent expectations for low US interest rates, and investor appetite for high-yielding currencies.
• Sterling has continued to edge upwards in trading this morning, though unemployment data, which is released at 09:30BST and is forecast to reveal a higher claimant count, could hamper demand.

Related posts:

1. The pound fell below $1.60 on Friday, and rising risk aversion has seen it tumble further this morning
2. The pound has reversed recent losses against the aussie, supported by rising risk aversion
3. Negative UK economic data pushes the pound down against a broadly weakened dollar

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.
• In trading this morning sterling has edged lower, as investors await details of the UK’s inflation rate, which is predicted to fall to 1.3%. Should the rate fall below 1.0%, the governor of the BoE, Mervyn King, must write a letter explaining the fall, though the time of this release is undisclosed.

Related posts:

1. Sterling lost ground against the euro on Friday, and has dipped below 1.09 in trading this morning
2. Sterling edged up against a broadly weaker dollar ahead of important central bank announcements
3. Sterling weakness drags it down below 1.60 following King’s comments

The pound edged down against the kiwi as rising risk appetite in the market offset the BoE’s decision to hold their monetary policy unchanged.

• Investors continued to buy into the higher-yielding New Zealand dollar, encouraged by rallying global equity markets and a broadly weaker dollar.
• In the UK, the BoE kept interest rates at 0.5% and decided against extending the quantitative easing programme as some had feared.
• However, the decision only gave the pound a muted boost against the kiwi, as investors had already priced the news into the market.
• In trading this morning, the kiwi has trimmed its gains as investors lock in some profits and as comments from the Fed Chairman suggested that the US may need to tighten monetary policy, spurring a slight return to the US dollar.
• However analysts have noted that overall market sentiment towards the kiwi is still pretty bullish, and that any upward movement for the pound is likely to be as a result of profit taking, rather than decreasing demand for kiwi assets.

Related posts:

1. Kiwi halted its climb yesterday, as demand for higher-yeilding currencies weakened
2. Sterling made gains against the kiwi yesterday, but rising risk appetite has supported kiwi advances today
3. Positive economic data from NZ, keeps the kiwi rallying higher vs sterling

The pound climbed just over a cent (0.6%) against the dollar, buoyed by the BoE’s decision to keep its assets purchase scheme on hold.

• In early trading sterling moved up against a broadly weak dollar, supported by expectations that the BoE would keep interest rates unchanged and maintain its current level of quantitative easing.
• The dollar also came under pressure, falling broadly as rising equity markets fuelled demand for riskier assets at the expense of the safe haven US currency.
• Dollar selling was led by positive employment data in Australia, which spurred investors to relinquish positions in the greenback in favour of higher-yield currencies, favouring an upward movement in the sterling/dollar pair.
• At midday, the BoE announced no change to their current monetary policy, which allowed the pound to advance further, reaching a ten day high of 1.6117.
• However, sterling did cap its gains as Mervyn King left the door open for further quantitative easing in the future.

Related posts:

1. Pound was supported yesterday by the MPC minutes but has resumed its slide so far today
2. Sterling made gains against the kiwi yesterday, but rising risk appetite has supported kiwi advances today
3. Pound advanced against a broadly weaker euro yesterday, but has stumbled in trading this morning

Sterling was unable to build on Wednesday’s gains, as trading between the pair held steady following a relatively muted market response from the two interest rate statements.

• Yesterday morning, the pair remained tightly range bound as investors held back from taking positions ahead of the rate statements from the two central banks.
• Analysts noted that people had taken sterling a lot lower recently and maybe now they were beginning to think that the BoE would not extend quantitative easing
• At midday it was revealed that the BoE did decide to hold both the interest rate and the asset purchase scheme at their current levels.
• However, sterling was unable to build on an intra-day high of 1.0916, as ECB President Trichet avoided seeming too dovish over the eurozone’s recovery.
• Trichet did speak of the need to be “prudent and cautious” over the coming months, but he acknowledged that the eurozone economy was stabilising, recovering at a gradual pace, which enabled the single currency to rebound in the afternoon.

Related posts:

1. Selling pressure held firm on the pound yesterday, with the euro price falling below €1.08
2. Sterling posted gains vs the single currency, with the market forecasting no change in MPC policy
3. Dovish words from the ECB president dragged the euro lower against the dollar yesterday

Having hit a fresh six-month low against the single currency in early trading , the pound rebounded yesterday, to close up half a cent at 1.0864.

• Unexpectedly weak data in the UK manufacturing industry on Tuesday continued to weigh heavily on the pound, dragging sterling to a 6-month low of 1.0781.
• With little data out in either the UK, the eurozone, or the US yesterday, markets initially continued to take direction from Tuesday’s data, which supported sterling selling.
• The euro trimmed its gains though following the second quarter final GDP figure for the eurozone, which was revised downward from a contraction of 0.1% to 0.2%, dampening the broadly positive sentiment towards the currency.
• In trading today investors will be listening carefully to both the MPC and ECB’s respective rate statements for clues to future rate movements.
• Both central banks are expected to keep interest rates at record lows, however analysts have noted that the BoE, in light of recent economic data, may hint at extending their asset purchase scheme before the year’s end, which could greatly weaken the UK currency.

Related posts:

1. Sterling relinquished strong gains vs euro yesterday as risk appetite eased
2. The euro posted gains against the US dollar on Friday and has reached back over 1.46 this morning
3. Sterling made gains against the kiwi yesterday, but rising risk appetite has supported kiwi advances today

In trading yesterday the pound picked itself up from 6-month lows against the single currency, gaining 0.7% as positive data buoyed investor sentiment.

• In a final revision, Britain’s second quarter GDP figure was reported as -0.6%, up from a previous revision of -0.7% and strengthening claims that the UK will exit recession in the third quarter.
• There was also positive data from the UK CBI retail sales index, which showed considerable improvement from last month, reaching levels well above expectations.
• Additionally, lending to individuals rose in August, reflecting both an increase in the willingness of high street banks to extend credit, and also improved consumer confidence in the market as they begin to take on more debt.
• In the evening, it also emerged that the BoE may not be planning to lower interest rates, backtracking from King’s recent comments, and enhancing the pound’s yield appeal.
• Sterling fared well following the day’s news, but its gains were capped as it was also revealed that the U.K.’s current account deficit widened in the second quarter to its largest level for nearly two years, as investment income narrowed.

Related posts:

1. Positive data from NZ keeps the kiwi advancing against the pound
2. Pound edged higher against the euro yesterday and has consolidated its position this morning
3. The dollar reversed its slide yesterday, buoyed by stronger equities, but has fallen back today

The pound slowed its rate of decline against the kiwi yesterday, falling just 0.03% as weak Asian trading dulled risk appetite.

• The pound slipped lower, but stemmed its rate of decline as demand for the higher-yielding currency was curbed following weaker trading on the Asian markets.
• Sterling has been broadly sold recently following comments from the King and BoE, however the strong European stocks prevented the pound from sliding too sharply yesterday.
• Major European and US stock indices climbed between 1 and 2%, firming up confidence in the global recovery, and lending slight support to the ailing pound.
• In trading this morning however, the kiwi has already advanced 0.7% following positive building consents data from New Zealand, which has encouraged investor demand.
• Analysts say that with stocks continuing to push higher and central banks not yet ready to unwind stimulus measures, the New Zealand dollar is likely to maintain its upward trend.

Related posts:

1. Positive economic data from NZ, keeps the kiwi rallying higher vs sterling
2. The pound fell below $1.60 on Friday, and rising risk aversion has seen it tumble further this morning
3. Pound edged higher against the euro yesterday and has consolidated its position this morning