Posts Tagged ‘Quantitative Easing’

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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Goldman Sachs recommends buying a pound / dollar

Posted by admin on October 15th, 2009

Currency strategists Goldman Sachs recommend buying a couple of pound / dollar. The bank believes that the short-term weakening of the dollar will continue. The relative growth, the correlation with the cyclical assets and capital flows continue to signal that, in the following months, the U.S. currency will continue to decline. Downtrend of the dollar probably will continue to provide support to European currencies, including the British pound. If you believe a member Monetary Policy Committee Fischer, in November, Britain could make a pause in the policy of quantitative easing, but good data on the PMI index, and the growth can support the pound.

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Bearish sentiment towards the pound prevailed yesterday, but the sterling is rallying strongly against the euro today

Posted by admin on October 15th, 2009

The pound relinquished early gains against the single currency, closing marginally down at 1.0704 as rising risk appetite benefited the euro. Sterling initially rose against the single currency yesterday after data showed a smaller than expected rise in the number of UK jobless claiming benefits, and the overall unemployment rate unexpectedly held at 7.9%. This data prompted investors to further pare back some of the heavy bets built up against sterling in recent weeks, which have pushed the price to multi-month lows. In addition, some analysts have said that speculation over an extension of quantitative easing could be overdone, and that the pound / euro price could have correction potential.

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Strong commodity prices and doubts over the UK economy allow the aussie to gain further ground

Posted by admin on October 13th, 2009

The Australian dollar continued to push higher yesterday, advancing over a cent as sentiment towards the higher-yielding currency remained positive. Commodity currencies, such as the aussie, made progress yesterday in line with stronger prices for oil and metals. Rallying global equity and commodity markets encouraged the rise in risk appetite in the market, which heightened demand for the aussie dollar. In the UK, the market still holds the view that further quantitative easing could be announced in November, which has put substantial pressure on the UK currency as other major economies look to wind up stimulus measures.

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Sterling loses further ground to the dollar on specualtion of a further extension of QE

Posted by admin on October 13th, 2009

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.

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

Posted by admin on October 9th, 2009

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.

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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

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.

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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.

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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.

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