Forex News » Monetary Policy

Sterling hits 17 month low against dollar, high against euro

Tushar Mathur — Mon, 16 Jan 2012 14:11:09 +0000

Sterling hits 17 month low against dollar, high against euro is a post from: Forex News

On Friday, the sterling was high against the struggling euro. The euro for past week it was reported to be 16 month low against dollar however on Friday they said that euro has been at 17 month low. Later on a day count the sources for the euro zone government informed that the Standard & Poor cut the ratings to low grade.

Warning was made on December regarding the cuts in the rates. This lower of rating has been across several countries and even the Germany was not included in the list. The sterling fell down against pence for about 1% and reached to 82.78 however it was roughly high against single currency (euro).

Noticing the statistical graph between euro and pence, the euro is noted to be at 82.22 pence. It was the lowest noted level since September 2010. Nevertheless the exporters and traders think that the euro zone debt crisis has reached a greenback that is it has finally got a back up. The pound (sterling) is tracked to be low not alone against the euro but also against dollar as well.

At July 2010 the objective barrier was set to be $1.5250 but it was breached to some low at $1.5234 which is 0.7% low. In the retracement of rally in the pound the 61.8% improvement is seen for sterling. The level of demand that is being expected was not achieved but on other side the Italy sold 4.75 billion Euros in the debt. Sterling is the single currency which is at some sentimental risk.

On Thursday the stellar sale the Spanish bonds however the Italian debt auctions also possess some reasonable pressure but not the expected demand. The BOE (Bank of England) will ease the monetary policy a so in the nearer sates the analyst has detected that pound could face some pressures.

Swiss franc is flirted with record high against euro

Tushar Mathur — Tue, 21 Jun 2011 12:06:23 +0000

Swiss franc is flirted with record high against euro is a post from: Forex News

Since Thursday Swiss franc is low against euro. On the forex trade on Thursday the Swiss franc fell against euro and the reports concluded that this state will prevail and the debt crisis for the Greece will be soon resolved. Swiss franc had its all time record of being at 1.1946 however at the Thursday trade close at regarding the New York forex trade, the Swiss franc was at 1.2033 per euro.

Investors has dragged the Swiss to the safe zone of investing over the risk area values but on Thursday the Swiss national bank (SNB) announced about the strength that it is being going through however investors ignored them from accepting, this reason has caused the Swiss franc to be low against euro and dollar.

Regarding dollar, the Swiss franc is currently 0.8499 per dollar. Swiss national bank has taken some advantage over Swiss franc when the value graph shows some kind of inflation and deflation risk in it. SNB (Swiss national bank) has been intervened between the forex and the franc in the periods of March 2009 to the extension of June 2010.

The unbalance and uncertainty of the European peripherals has supported the downside risk between the ranges of euro and Swiss franc. Their support has brought them to high level up to 1.1930 and 1.1850 regarding euro and franc respectively, said by analyst in one of his research note and he is named Marcus Hettinger.

The quarter monetary policy assets have been warned by the Swiss National Bank (SNB) on that Thursday. Nevertheless the Swiss franc was strong enough at its margin level of its Swiss exporters and during this the Swiss national bank also reported that they are planning to sell off the Swiss franc to boost its rise. Euro zone extended emergency loans from finance minister.

Pound May Climb On Asset Purchase Program Ending

admin — Mon, 18 Jan 2010 11:12:00 +0000

Pound May Climb On Asset Purchase Program Ending is a post from: Forex News

The U.K. currency may be experience a shift on its sentiment as speculations suggest that the current quantitative easing measures used by the nation’s central bank will be terminated, as the country starts to publish positive economic reports, suggesting that the recession may be ending in the British Isles.

This week will be decisive for the pound as inflation yearly numbers are due to be published the next Tuesday, and if forecasts will be confirmed, the numbers are expected to surpass Bank of England’s target below 2 percent for the first time in seven months, fueling even further speculations that quantitative easing measures will be lifted in the U.K. anytime soon this year. The 200 billion pounds used for bond purchasing will have their last part of 25 billion to be used by early February, and the next central bankers’ meeting may already bring better news for the sterling if the country’s monetary policy change its direction.

The pound has been suffering from an insistent recession combined with a struggling financial system and ineffective policies taken by the Bank of England to combat the crisis, but as economic data improves, the pound may advance considerably, since it was one of the currencies who lost the most among the main traded ones in foreign-exchange markets last year.

GBP/USD traded at 1.6277 as of 02:20 GMT from a previous rate of 1.6256 when markets closed last Friday.

If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

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Pound to Decline Versus Higher-Yielding Currencies on Weak Recovery

admin — Mon, 11 Jan 2010 13:18:00 +0000

Pound to Decline Versus Higher-Yielding Currencies on Weak Recovery is a post from: Forex News

The United Kingdom has been showing itself as one of the least resilient nations among the wealthiest countries in the world, and its weak economic data combined with a ineffective monetary policy is likely to set the sterling further down in the first semester of 2010, specially versus

higher-yielding options

Bank of England policy makers insisted to extend its so far frustrated bond purchase strategy, injecting its remaining 200 billion pounds on the program, as interest rates remain at an all-time record low of 0.50 percent, maintaining the pound’s outlook negative, specially as the traders started the year with high levels of risk appetite. Commodities linked currencies like the Australian and the Canadian dollar are likely to rally further versus the pound this year, and demand for energy is likely to favor these oil producer’s currencies, specially for Canada’s currency, as the winter in the Northern Hemisphere has been one of severest in the past year, increasing demand for energy in the United States.

This week will be marked by a monthly manufacturing production report in the U.K., which has provided mixed data in the past months, but nevertheless, as analysts aren’t very optimistic regarding British economic growth in the first quarter of 2010, the pound has considerable odds to lose further versus the currencies above mentioned.

GBP/CAD started this week trading at 1.6495 from as high as 1.6850 one week ago.

If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

CBR should inflation

admin — Fri, 30 Oct 2009 14:42:00 +0000

CBR should inflation is a post from: Forex News

Financial Analyst FxPro Alexander Kuptsikevich: On Thursday, the board of directors of Bank of Russia decided to lower the refinancing rate by half a percentage point to 9,5%. As stated in the declaration, such a decision in the first place “stimulates the activity of the credit of the banking sector. This means that the Bank intends to continue to struggle with the strengthening of the ruble, using not only the purchase of currency on the market.

One reason for the deepest recession in Russia served as a huge amount of foreign loans. If the situation gets out of control the central bank may apply the effective action only in respect of its own currency. During the fall, economic activity is an objective measure of the depreciation of the currency, but in our circumstances (and an even greater extent in the countries of Central and Eastern Europe), this policy simply increases the volume of bad debts.

One solution to the Central Bank has been a significant limitation on the issuance of new loans in foreign currency. But in the long term, not long-term use of protective barriers. Another option is to bring monetary policy in conformity with what is observed in the creditor countries, of course, subject to Russian realities. As is evident from the statement of the Central Bank, this is the ultimate goal of policy. The stakes for business in the 14-18%% APR prohibitively large, they consume a significant portion of the profit only to debt servicing. And in this case slowing of inflation favors the monetary authorities. Following its decline in the Bank can cut rates, making them more acceptable to companies originating loans in rubles.

Inflation may slow down for two reasons: a weak activity in the country and the strengthening of the ruble against other currencies for external reasons. But strengthening of the ruble has many other negative effects (pressure on Russia’s companies and the growth of speculative interest rate). With great probability it can be said that the chosen course for further narrowing the interest rate differential between Russia and other countries with a gradual weakening of the screws on lending in foreign currency. While these restrictions still look reasonable.

On hand in this case will deter the growth of energy prices. Such a trivial move for oil-exporting countries suddenly began to move and some representatives OPEK.Pri such developments in the coming years we will not talk about the windfall from oil and curbing the growth rate of the ruble and inflation.

In the short term, the ruble may still continue to rise for this week to 28.80 on news of the strengthening of economic activity in the world and the development antidollarovyh sentiment. New highs for oil can also strengthen the value of the ruble to a basket, today it has updated at least since the beginning of the year, referring to 35,33 p. As a result, increases the likelihood of further reductions in rates and falling inflation, but it is unlikely to create jobs and stimulate business activity.

Euro is more expensive than a pound before the end of the year

admin — Tue, 27 Oct 2009 17:38:00 +0000

Euro is more expensive than a pound before the end of the year is a post from: Forex News

Today, one of six bank Moors BNP Paribas said that in 2009 the pound sterling could fall to parity with the euro. Today, steam EUR / GBP is trading at around 0.9070, up from 0.84 in mid-June. The jump came when it became clear that the Bank of England will continue to build a program to repurchase the assets, despite the improvement in the global financial sector. What happens to the pound and the UK economy is studying financial analyst FxPro Alexander Kuptsikevich.

In Russia, considered to be the beginning of the crisis in September last year. But in fact the developed world crisis began one year earlier. In September 2007, in the UK because of losses on U.S. sub-prime mortgage securities, was taken to balance the state a major bank Northern Rock. Since it became abundantly clear that the credit crisis in the U.S., will lead to worse consequences in the UK. As a result – the tightening of credit in the country, and the collapse of property prices, which partly helped to mitigate the monetary policy.

The year before the bankruptcy of U.S. giant Lehman pound has lost 15% against the euro (EUR / GBP rose from 0.6730 to 0.7750). After loud bankruptcy and rapid deterioration in the economy pound has fallen in price to a single currency by 26% (to 0.98) to the beginning of the year. As repeatedly noted by the representatives of the Bank of England, is weakening played a positive role in the economy, supporting industry and services, and leaving a positive inflation in the country. After Armageddon in the minds of market players is over, sterling has been gradually restoring its position. He became a kind of mirror for the financial sector. Pound bought on positive news from the banks and sold on the negative.

At the moment if we compare the euro area (not scratchy EU) and Britain, the latter certainly looks worse. GDP fell in the UK for the year to 5,5% for the second quarter and 4,5% in the euro zone. In the third quarter of Britain’s economy is once again demonstrating the decline in the euro area reasonably expect positive growth rates.

Such a sad situation for Albion reinforced expectations of quantitative easing monetary policy already at a future meeting of the Bank of England (5 November). Perhaps such assumptions and BNP Paribas was forced to revise the forecast for the pound to parity this year, but not in the first quarter of next.

Nevertheless, the weakening of the pound is very effective method of recovery. Bank of England has “published” a huge amount of 175 billion pounds. While the financial system remains “frostbitten”, and injections are not fully reflected in the dynamics of the market, but in the next few quarters it will definitely happen. As a result, the pound, we will probably see the same picture as the U.S. dollar: for a healthy economy and to reduce the debt burden will be useful to drop the course, and it is unlikely that officials will be hindered.

The dollar is recovering losses against euro on speculation that the Fed may signal a tightening of monetary policy

admin — Tue, 27 Oct 2009 09:12:00 +0000

The dollar is recovering losses against euro on speculation that the Fed may signal a tightening of monetary policy is a post from: Forex News

Having traded strongly against the dollar in the early session, the euro surrendered gains in the afternoon session, pulling the price down sharply to close a $1.4873.

Initially, the greenback hit a fresh 14-month low versus the euro after the Beijing-based Financial News revived concern over the status of the dollar, stating that China should raise the amount of yen and euros held in its foreign-exchange reserves.
However, the dollar pared its losses after the author of the report said that it was purely a “personal view”.
In addition, the issue of diversification has been a topic for quite a while and the impact of the news was short-lived. Analysts noted that investors were particularly short on the dollar already and were cautious about over-selling.
In the afternoon, the Chicago Fed announced that its Midwest Manufacturing Index rose 1.0% in September offering more evidence that the US economy is digging itself out of the economic slowdown and lending support to the greenback.
The single currency lost further value with the US stock markets opening in the red, which in turn pulled European equities negative, discouraging euro investment.

Morgan Stanley predicts the strengthening of the Swiss franc

admin — Fri, 23 Oct 2009 17:10:00 +0000

Morgan Stanley predicts the strengthening of the Swiss franc is a post from: Forex News

According to currency analysts Morgan Stanley, by the end of the Swiss franc could strengthen to a mark of 1.50 against the euro (compared to before. Forecast 1.54), as well as economic recovery and higher inflation leads central bank to stop selling the currency. As noted in the bank, some central banks began to tighten monetary policy, while others have begun to reduce the amount of anti-crisis program – against the background of these circumstances, market participants would react with great attention to the question whether the Swiss National Bank to change the selected course of monetary policy. The bank believes that this will happen as soon as eliminating the need for its conservation. At Morgan Stanley believes that, given the emergence of an increasing signs of economic recovery, both global and domestic foreign exchange intervention policy is increasingly irrelevant. By the end of March, analysts predict a rise in bank franc to a level of 1.48 (compared with before. Prognosis 1.55). Currently, the euro / franc traded at 1.5119.

The kiwi edged higher against the pound but has weakened this morning following important Chinese data

admin — Thu, 22 Oct 2009 08:28:00 +0000

The kiwi edged higher against the pound but has weakened this morning following important Chinese data is a post from: Forex News

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.

Sterling made substantial ground on the dollar yesterday as the BoE showed no sign of loosening montary policy further

admin — Thu, 22 Oct 2009 08:19:00 +0000

Sterling made substantial ground on the dollar yesterday as the BoE showed no sign of loosening montary policy further is a post from: Forex News

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.

Bank of England voted unanimously to maintain the key rate

admin — Wed, 21 Oct 2009 20:27:00 +0000

Bank of England voted unanimously to maintain the key rate is a post from: Forex News

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. Regarding the development of world and national economies, in general, there is a positive trend.
In the short run, inflation is volatile. Nevertheless, the medium-term inflation forecast, which is crucial for the determination of monetary policy, is not subject to the influence of these short-term events … This is supported by research and market indicators “

Bank of Canada left interest rates at the same level

admin — Wed, 21 Oct 2009 08:02:00 +0000

Bank of Canada left interest rates at the same level is a post from: Forex News

Bank of Canada today adopted a decision to leave the refinancing rate unchanged at 0.25%.
The latest indicators show the beginning of the withdrawal of the world economy from deep recession. State of the world economy and the general trends in the financial markets have been somewhat more favorable projections, which were listed in the July report on monetary policy the Bank of Canada.
Given the current interest rate factors in Canada can not remain at current levels until the end of the second quarter of 2010 for the achievement of targeted inflation .

Euro pushes higher but finds strong resistence at $1.50

admin — Tue, 20 Oct 2009 08:23:00 +0000

Euro pushes higher but finds strong resistence at $1.50 is a post from: Forex News

The single currency resumed its climb against the dollar in trading yesterday, supported by rising confidence in the global recovery, closing the day up 0.4%.

The euro hovered just below the psychologically important 1.50 level as the US dollar remained under selling pressure on expectations that US interest rates will remain pinned at record lows well into 2010.
The single currency also found support as some investors speculated finance ministers from the 16-nation region meeting in Luxembourg would focus on the currency’s strength.
The dollar came under further pressure as the continued confidence over the prospects of a global economic recovery were reaffirmed as the Dow Jones opened up over 10,000, keeping haven demand for the dollar in check.
Late in the afternoon, the Fed added to the greenback’s woes after stating that it has been testing its reverse repurchase agreement tool but is not about to use it, suggesting that US monetary policy is not set to tighten just yet.

End of the line for the old monetary regime

admin — Fri, 16 Oct 2009 13:21:00 +0000

End of the line for the old monetary regime is a post from: Forex News

What does the financial crisis in the context of monetary policy? The answer may seem obvious. Central banks have responded to the stalling of interbank markets with massive injections of liquidity. When they ran out of room to maneuver with a short-term rates, they have a direct impact on the money supply through quantitative easing. As conditions stabilized, the question arises: when and how to tighten policy, so as not to push an already fragile economy back into recession or not to allow another major round of inflation.

Specific solutions have been widely obsuzhdaemy, but has been relatively little discussion about the purpose or structure in tactics. Since 1970 in Britain and the rest of the world was very much a political and theoretical agreement is that monetary policy should focus on price stability. To achieve this goal, it should be conducted by an independent body that will haunt the explicit target for inflation (or money supply, as the immediate goal). The crisis has made political decisions more difficult, but not put the structure in question.

However, we can not say the same about financial regulation. In this issue has never been a similar agreement on the objectives or the political structure, and much of what has been achieved in this regard – just flew out the window. At the moment there is some agreement on the changes that must be done: to raise the requirements for capital, especially in trade, tighten supervision; to tighten control over liquidity will (probably), and limits on bank bonuses. We still lack a common coherent regulatory scheme, but no one pretends that we have it, and at the same time, it seems we have enough political will to implement tough new rules to regulate.

The contrast between the two areas of public policy debate – monetary policy and financial regulation – are striking. In practice they are closely intertwined.

One of the first conclusions on the financial regulation is that one piece of the puzzle is missing: “prudential makropolitichekaya” function. Lord Turner is highlighted in his report to the UK, as well as Jacques yes Larozer in his – for the EU. Someone has to monitor not the risks posed by specific agencies, and the systemic risks that arise from the behavior by a group of institutions. For example, such analysis can determine the risk associated with the extensive use of various channels of the banks or dangerous tendencies associated with the prices of assets such as housing or credit secured by securities.

Thus, in the new world order focus will be on a prudent macro policies. For these purposes, the EU created the European Council on systemic risk, which is headed by Jean-Claude Trichet of the ECB with Mervyn King as a representative.

The fact that these two goals are in a position of potential conflict is not new, but has been traditionally poorly lit in the past three decades. Alternatively, to which we shall return, is the recognition that monetary authorities should pursue the goals that are complex and not amenable to simple planning.

Top bankers have been very silent on this issue. They may prefer to somehow bring the matter to an end, rather than revise their functions. The old approach to politics has a number of positive features. If the work of CB may be narrowly defined, then the politically easier and more profitable to actually ensure operational independence. But if the goal of the Central Bank must be complex, requiring him, to seek a compromise between competing political objectives, then the politicians will be more difficult to stay away from the monetary control.

The Financial Times
October 15

Sterling has rallied strongly against the euro, pushing up over 1.09

admin — Fri, 16 Oct 2009 08:01:00 +0000

Sterling has rallied strongly against the euro, pushing up over 1.09 is a post from: Forex News

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.
His comments echoed those made by fellow MPC member, and deputy Bank governor, Charles Bean, who said on Tuesday that as the recovery proceeds, the Bank would need gradually to remove the large monetary stimulus or risk overshooting its 2 per cent inflation target.
Sentiment towards the pound has remained buoyant in trading this morning, with the pound currently consolidating its positions above 1.09.

For Britain – low interest rates and the weakening pound

admin — Wed, 14 Oct 2009 16:27:00 +0000

For Britain – low interest rates and the weakening pound is a post from: Forex News

With the advent of a more precise plan of the Conservative Party of Great Britain and slightly more predictable state of the economy of this country, it becomes possible to make assumptions about the future situation. Our latest economic forecast, which will be published later, reflects our average estimate compiled on the basis of stronger data and political development. In these circumstances, we expect the Conservative Party victory in the May elections with a substantial margin for the majority of seats in the cabinet. As a result, we see that monetary policy will receive a “powerful acceleration, while the fiscal experience a strong reversal.

We expect to reduce state spending by 80 billion pounds, increasing revenues from indirect taxes by 20 billion pounds and “return to the development of” package valued at 3 billion pounds. The good news for the Tories (Conservatives), it seems that their policy should work, the budget deficit fell to 2,5% of GDP before the end of the term Parliament, the economy has not fallen into recession, while unemployment will remain high and will grow gradually – but will start to decline in 2013.

The success of policies depends largely on maintaining a soft monetary policy – a combination of quantitative easing, and the base interest rate at 0.5%, at least until mid-2011 and will reduce the yield on 10-year state bonds to 2,5% in the next two years. This will lead to the continued weakening of the exchange rate of British currency – the pound will fall to 1.40 to the dollar and may temporarily reach parity with the euro, despite concern about the markets first signs of structural weakness of the euro.

Low interest rates and competitive pound in the end regains net exports, partly to restrain imports of industrial goods and investment, particularly in kommecheskuyu property. GDP growth from 2010 to 2014 the average will be slightly below 1.5% – not high, not much lower than in any other strategy. Following the recovery from recession in the second half of 2009, growth will return in 2010, but slowed again in 2011-2012 i.i, to the extent that the tax concessions to be abolished. In 2013-2014 GG growth will exceed 2,0% for the first time since 2007.

Naturally, there are risks. The biggest risk is that external factors and a weak pound could presage that inflation is too high in order to keep low interest rates. That is why the Tory strategy of the labor market is so important – “return to work” on the plan may be worth the money (we assume more than voiced in the press 600 million), but they are required to curb the growth of unemployment and maintaining downward pressure on inflation in the costs of business expenditures and as a consequence of the consumer price index.

But conservatives can legitimately argue that the risks of alternative scenarios is much higher – the risk that financial markets would refuse to finance the growth of debt burden and a wider economic crisis.

We believe that the plans of George Osborne (George Osborne, head of the Shadow, the opposition, the Cabinet of Ministry of Finance) is correct, but they largely depend on the situation in the world economy, on growth outside the United Kingdom and the maintenance of confidence in the markets.

The economics of George Osborne -
assume very low interest rates a weakish pound and falling bond yields,
center of economics and business research ltd (cebr)
October 6

Euro posts gains against the US dollar as risk appetite ushers investors into high-yielding currencies

admin — Tue, 13 Oct 2009 08:53:00 +0000

Euro posts gains against the US dollar as risk appetite ushers investors into high-yielding currencies is a post from: Forex News

The single currency recovered some of the losses it incurred on Friday, gaining over half a cent against the greenback as risk appetite in the market strengthened.

Rallying equities yesterday, which have been boosted by stronger commodity prices and optimism about the US corporate earnings season, also buoyed support for the euro, allowing it to briefly trade over 1.48.
Analysts also noted that while in other nations future policy remains hazy, the single currency benefited from a clearer outlook for monetary policy in the eurozone.
Additionally, comments from the president of the St Louis Federal Reserve that the US economy faced risks from rising inflation, stoked speculation that US interest rates might rise sooner than had been expected, but investors remained bold in their exposure to risk, continuing to sell the dollar.
This morning, the pairing is trading relatively steadily around yesterday’s closing price, although the euro is likely to find support from a German economic sentiment survey, released today at 10:00BST.
In the US, investors await figures on the Federal Budget Balance, however the exact time of the release is unknown.

Sterling slides further in the wake of a damning UK economic report

admin — Tue, 13 Oct 2009 08:26:00 +0000

Sterling slides further in the wake of a damning UK economic report is a post from: Forex News

The pound maintained its downward trend yesterday, losing a further 0.6% as a British report cast doubts over UK recovery prospects.

The outlook for global monetary policy shaped action on the foreign exchange markets on Monday, with sterling the main casualty.
A report from the Centre for Economics and Business Research predicted that UK interest rates would remain at their historic low of 0.5% through 2010. The report also forecast they would stay below 2% until 2014.
That would be likely to leave sterling the lowest-yielding major currency at a time when interest rates outside the UK look set to start rising, which added selling pressure to the fragile pound.
In trading this morning, the UK currency has continued to lose ground, with a positive housing price survey failing to buoy demand.
Sterling may find some support today should the Consumer Price Index reveal a slightly higher inflation rate at 09:30BST. Gains may be short lived however, with forecasts predicting an upbeat German economic sentiment survey, figures of which are released at 10:00BST.

Demand for the kiwi remained strong yesterday, but it has lost ground in the wake of comments from Ben Bernanke

admin — Fri, 09 Oct 2009 08:24:00 +0000

Demand for the kiwi remained strong yesterday, but it has lost ground in the wake of comments from Ben Bernanke is a post from: Forex News

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.

The aussie continues to trade strongly, supported by risk appetite in the market

admin — Fri, 09 Oct 2009 08:22:00 +0000

The aussie continues to trade strongly, supported by risk appetite in the market is a post from: Forex News

The aussie climbed a further two cents yesterday as figures revealed rising employment in Australia, and as rising risk appetite supported strong demand for high yielding currencies.

The Australian dollar continued to push higher as encouraging data from the labour market gave investors further cause to buy into Australian assets.
The recent rate hike to 3.25% has increased the yield gap between the two currencies, and the recent downturn in unemployment has simply reinforced the sentiment that Australia is at the forefront of the global economic recovery, strengthening aussie demand.
Additionally, gold prices pushed record highs for the third straight day yesterday, which supported demand for the commodity driven aussie dollar.
The pound has slipped below the 1.77 mark in trading this morning, though its rate of decline has slowed following comments from Ben Bernanke
The Fed Chairman spoke of the possibility of tightening the US monetary policy which has led some investors to trim their long positions in the aussie dollar.