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.
Posts Tagged ‘Boe’
Pound advanced vs a weakened dollar yesterday, supported too by a hold in the UK’s QE programme
Posted by admin on October 9th, 2009
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The sterling/euro price closed relatively unchanged yesterday as both the MPC and ECB held rates.
Posted by admin on October 9th, 2009
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.
Sterling posted gains vs the single currency, with the market forecasting no change in MPC policy
Posted by admin on October 8th, 2009
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.
The UK economy is showing signs of recovery, which has buoyed the ailing pound
Posted by admin on September 30th, 2009
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.
Sterling fell just 0.03% against the kiwi yesterday, but has suffered in trading this morning
Posted by admin on September 29th, 2009
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.
Aussie has advanced further vs sterling as talk of interest rate hikes is renewed
Posted by admin on September 29th, 2009
Sterling slid for the third consecutive day against the Australian currency yesterday as the pressure of recent events and statements continued to weigh heavily.The aussie pushed higher, gaining another 0.9%, as the pound failed to shrug off comments made last week that a weak currency was in keeping with the BoE’s policy. The aussie dollar was also supported from a rise in commodity prices, particularly gold, which rallied back above $1000 per ounce yesterday. Additionally, risk sentiment among investors returned as stocks in Europe and the US traded strongly, buoying demand for riskier assets.
Bearish sentiment towards the pound on Friday allowed the kiwi to make substantial gains
Posted by admin on September 28th, 2009
The kiwi dollar climbed another 1.2% on Friday, as demand for the high yield currency remained strong in the wake of positive economic data. Investors continued to move their funds into the riskier currency on Friday as data in the US revealed a strengthening economic recovery. Selling pressure on the pound was also high on Friday as comments from the BoE revealed their willingness to see the currency remain weak, undermining investor confidence. The kiwi also received support from a slight rise in oil prices. The New Zealand dollar tends to fair well when commodity prices are on the up owing to the nature of the economy.
The pound has reversed recent losses against the aussie, supported by rising risk aversion
Posted by admin on September 28th, 2009
The pound lost another 1.0% to the aussie dollar on Friday to close at 1.8373, as selling pressure remained strong. The aussie dollar reached a twenty-four year high against the pound on Friday, as King’s comments continued to weigh heavily on the pound. On Thursday, the BoE governor made it clear that he was not too concerned about the current weakness of the pound, and that he was in fact in support of its current value in order encourage a rebalance towards an export led economy. The news reaffirmed that interest rates would remain low for some time, which encouraged investors to sell the pound in favour of the high-yielding aussie.
The pound fell below $1.60 on Friday, and rising risk aversion has seen it tumble further this morning
Posted by admin on September 28th, 2009
Confidence in the UK currency remained weak on Friday in the wake of comments made by Mr King and the BoE, with the price sinking below $1.60. Having initially fallen to a four month low of 1.5921 in the early hours of Friday morning, the pound proceeded to consolidate above 1.60, with analysts suggesting that a bullish correction was expected in the wake of Thursday’s plunge. However, bearish sentiment towards the pound soon returned, with traders continuing to dump the British currency on perceptions that the BoE would lag other countries in tightening its loose monetary policies. In the afternoon, a worse-than-expected reading in U.S.
Sterling continued to slide vs the euro on the run up to the weekend, but has capped its losses this morning
Posted by admin on September 28th, 2009
Sterling fell yet further on Friday on perceptions that the UK currency would be allowed to weaken to help the fragile British economy. The pound dropped to a fresh five-month low against the euro on Friday as traders continued to sell sterling following comments from Mervyn King that sterling’s fall was helpful in rebalancing the UK economy. Some analysts have suggested that these comments which have undermined the UK currency, have become a new policy tool with which the central bank can kick-start the economy. Pressure on the pound was also stemming from the UK’s budget deficit and continued speculation that the BoE might yet loosen monetary policy further.
Positive economic data from NZ, keeps the kiwi rallying higher vs sterling
Posted by admin on September 25th, 2009
The New Zealand dollar advanced for the third consecutive day yesterday, as demand for kiwi assets remained high and as sterling weakness becomes ever more apparent. The kiwi gained another two and half cents (1.1%) yesterday after the BoE announced that it was perfectly content with a lower currency exchange rate and was unlikely to initiate any type of tightening into its monetary policy for the foreseeable future.The kiwi also continued to be supported by positive economic data from New Zealand, which supported claims that the RBNZ is considering raising interest rates.The New Zealand currency has found support today after the G20 did not indicate any imminent withdrawal of stimulus measures, triggering a rush back into higher-yielding assets.Initially the kiwi lost ground following disappointing local trade data released late last night, but it has rebounded strongly, climbing 0.75% in trading so far today.
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.
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