The pound reversed its three-day slide against the euro as a surprise dip in a German economic sentiment index offset weak UK inflation data.In early trading, sterling was undermined by a declining inflation rate, which prompted further speculation that interest rates could be on hold at 0.5% until 2011 and sent the UK currency to a six-month low of 1.0628. The Consumer Prices Index (CPI) dropped to an annual rate of 1.1% in September from 1.6% in August. Meanwhile, the Retail Prices Index (RPI) inflation measure, which includes mortgage interest payments and housing costs, fell, to -1.4% from -1.3%.
Posts Tagged ‘Uk Currency’
Sterling picked up from early lows to post marginal gains against the euro yesterday
Posted by admin on October 14th, 2009
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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.
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.
Sterling slides further in the wake of a damning UK economic report
Posted by admin on October 13th, 2009
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.
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Kiwi halted its climb yesterday, as demand for higher-yeilding currencies weakened
Posted by admin on October 8th, 2009
Sterling reversed a three-day decline against the kiwi, posting marginal gains following a rise in risk aversion, closing the day at 2.1682. It was a choppy session for sterling, which initially dropped to a low of 2.1476 in early trading, as a lack of major economic data gave support to the higher-yielding currency. However, having dipped, the pound rebounded strongly, regaining over two cents as global equities backed off to trade in the red. Weak European stocks were followed in by the US markets, easing risk appetite and allowing the UK currency to stabilize in the afternoon, consolidating its position above 2.1650.
Sterling edged up against a broadly weaker dollar ahead of important central bank announcements
Posted by admin on October 8th, 2009
The pound reversed its steady decline against the greenback yesterday as investors relinquished defensive positions ahead of today’s MPC announcement. Cautious investors initially sought safety ahead of the two key central bank meetings today, putting pressure on the UK currency. Additionally, in an interview, Kansas City Federal Reserve President Thomas Hoenig said that the US central bank should start raising interest rates “sooner rather than later,” which buoyed confidence in the US economy. However, the greenback’s gains were limited, with the pound rebounding a cent from its intra-day low as investors felt that the market had gone too short on sterling positions ahead of today’s statements.
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.
Negative UK economic data pushes the pound down against a broadly weakened dollar
Posted by admin on October 7th, 2009
Sterling was unable to capitalize on an early rally against the dollar as weak economic data reaffirmed fears over the fragility of the UK recovery.Sterling initially advanced over a cent yesterday morning as selling pressure on the US currency mounted following an article stating that the dollar could cease to be used in oil trades in the Gulf States. However the pound relinquished its gains after weak manufacturing production data sapped investor demand for the UK currency. The manufacturing sector revealed a 1.9% decrease in production in August, reversing a three month increase in output, and falling well below expectations of a 0.4% rise.
Selling pressure held firm on the pound yesterday, with the euro price falling below €1.08
Posted by admin on October 6th, 2009
The pound was unable to capitalise on improved services data, eventually losing over half a cent to a broadly stronger euro.The pound initially found some respite as positive data from the services sector bolstered expectations that the economy resumed growth in the third quarter. The purchasing managers’ index for the services sector showed a rise to 55.3 in September, showing improvement from last month and exceeding market expectations. However, sterling quickly relinquished its gains over expectations that the MPC meeting later this week will reaffirm that the UK monetary policy will remain comparatively loose for some time.
Pound made gains against the aussie on Friday following weak US data
Posted by admin on October 5th, 2009
The pound advanced a further cent against the aussie on Friday, building on strong gains, as investors remained cautious following weak US employment figures. The US economy suffered 263,000 job cuts in September, which was far more than had been expected according to official data, sapping demand for ‘riskier’ assets. The pound advanced to over 1.84 as investors sold off the risky currency amid concerns that the US recovery may not be as robust as initially thought. However, the pound did cap its gains, as the US data dragged down European equities, with the FTSE falling below 5000 points, which dampened confidence in the UK currency.
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Sterling lost ground against the euro on Friday, and has dipped below 1.09 in trading this morning
Posted by admin on October 5th, 2009
Sterling gave back recent gains against the euro on Friday, losing 0.3% as risk aversion weighed heavily on the fragile UK currency. Sterling struggled in the morning as investor’s booked profits after the pound’s gains against the euro on Thursday, but trade was initially range bound ahead of US payrolls data. The pound also failed to gain traction after a Nationwide housing market survey showed prices were steady on the year in September, the first time since March that prices have not fallen on a year-on-year basis. In the afternoon, US payrolls data disappointed expectations, justifying the rise in risk aversion in the market and sending global equities spiralling further downward. Indeed, the FTSE 100 went back below the psychological 5000 level, which was particularly damaging for the pound In trading this morning the price has continued to climb in the single currency’s favour, though sterling may find support should UK services meet expectations and reveal a stronger month on month figure at 09:30BST.
The kiwi was weaker in trading yesterday following some concerning US economic data
Posted by admin on October 2nd, 2009
The pound made gains yesterday, taking support from a revised IMF report and an easing of risk activity to close the day at 2.2316 up 0.7%. Rising risk aversion enabled the pound to advance over a cent against the kiwi yesterday, with investors retreating into haven currencies. US employment claims rose last week, posting a figure well above forecast, dulling hopes of a swift recovery in the US, but supported gains for the UK currency. The negative data led to a sharp retreat in equity markets which prompted investors to sell the higher-yielding currencies.
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.
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Aussie edged higher vs the pound again yesterday, but sterling has rebounded following upbeat comments from a BoE policymaker
The aussie edged higher yesterday as continued strong demand for the high-yielding currency offset positive employment data in the UK. The UK currency found early support following better-than-expected employment data that revealed the rate of people claiming benefit allowance was declining.However, the news was unable to buoy a broadly weaker pound, with investors continuing to be attracted by the recent rate rise and general positive sentiment surrounding the Australian economy. The aussie also took advantage of rallying equity markets, which took their lead from better-than-expected quarterly earnings at JP Morgan reinforcing the notion that economic conditions are improving.
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