The pound made up further ground on the kiwi dollar, gaining 0.65% after positive sales data supported evidence that the UK economy is still on the road to recovery. The sales data, which came in above market forecasts, encouraged investors to buy back into the UK currency, with the price briefly reaching above 2.20. Conversely, selling pressure remained on the New Zealand dollar after the nation’s Prime Minister expressed concern over the currency’s strength, and stated that there were few tools with which to deal with it. Higher-yielding currencies were also under pressure overnight as Asian equities turned negative, with Nikkei 225 losing over a percent, dulling demand for “riskier” assets. In trading this morning the pound has continued to rally, rising to a three-week high over 2.22 as a New Zealand business confidence survey unexpectedly undershot forecasts, weakening the possibility of a hawkish RBNZ rate statement to be made this evening at 20:00.
Posts Tagged ‘Uk Economy’
Sales data took the pound higher against the kiwi, continues to climb in trading this morning
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The pound continues its rally against a broadly weaker aussie
Sterling edged up against the aussie yesterday, benefiting from improved UK sales data, which supported claims that the UK economy is recovering. On Monday evening, MPC member Adam Posen, following negative GDP data, stated that there were still signs of an economic recovery even if Britain is behind other countries in pulling out of the recession. His statement found support yesterday after the UK CBI sales showed month-on-month improvement, beating market expectations and buoying demand for the UK currency. The UK currency has pushed higher in trading this morning after investors pared bets of a steep rate rise in Australia after inflation data did not increase by as much as some had anticipated.
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Euro is more expensive than a pound before the end of the year
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.
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Sterling fell back significantly against the dollar on Friday, as GDP figure disappoints the market
Sterling lost three cents (1.9%) to the dollar, as a weak UK quarterly GDP figure abruptly halted the pound’s recent rally. The greenback gained the most daily value against the pound in a month as the UK’s economy unexpectedly contracted in the third quarter, giving the Bank of England more reason to expand emergency measures to spur growth. It is the first time UK gross domestic product has contracted for six consecutive quarters, since quarterly figures were first recorded in 1955. The pound fell more than a cent against the US dollar following the release of the figures, losing 0.6% in two minutes, with traders particularly concerned that the UK may turn out to be the only major economy still in recession.
UK economy contracted by 0.4%, which has and will continue to weigh heavily on sterling
In an uncertain day for the UK economy, the pound lost as much as 2.0% to the euro on Friday, sharply reversing its recent rally to close down at 1.0862. Data revealed that the UK economy unexpectedly contracted by 0.4% between July and September this year, confirming that the UK is still in recession. Quarterly growth of 0.2% had been expected, although expectations had been tempered by recent figures showing no growth in retail sales in September and a 2.5% decline in industrial output in August. Importantly, the disappointing GDP figures may now lead the Bank of England to consider the possibility of extending their asset purchase scheme in their November meeting in order to sustain the evidently fragile recovery.
UK GDP contracts by 0.4% – pound dives
Data this morning has run significantly against market expectations, confirming that Britain is still in a recession. The UK’s third quarter GDP figure was revealed to be a 0.4% contraction, which now means that the UK has suffered 6 consecutive quarters of negative growth. Market participants had speculated that the UK economy would grow by 0.2% in the months from July to September and had taken the pound slightly higher this morning. There has been data recently though that points to this disappointing figure. Data in early Ocotber revealed that manufacturing production had fallen by 1.9%, significantly below forecast and this has clearly weighed heavily on overall output.
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The kiwi edged higher against the pound but has weakened this morning following important Chinese data
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.
Pound continued to climb against the aussie yesterday as confidence in the UK economy improved
A broadly stronger pound hit a two-week high against the aussie, briefly rising over 1.8000, as confidence in the UK economy gained momentum.Sterling jumped following the minutes from the Bank of England’s latest policy meeting, which dampened expectations of an extension to quantitative easing. The minutes appeared to move the balance of market expectations to the possibility of a pause of the government’s asset purchase scheme in November, reversing recent speculation. In addition, the aussie dollar found its strength undermined as commodity prices, most notably oil, turned lower, discouraging investors from the higher-yielding currency.
Sterling made substantial ground on the dollar yesterday as the BoE showed no sign of loosening montary policy further
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.
A sterling crash is a godsend
Britain twice averted disaster over the past century, in a timely manner, if I may say so – he brought down the pound sterling. In both cases there was no apparent confidence that this recovery in the economy will last more than 10 years.Commentators have told us in 1992 that exit from the European exchange rate mechanism will cause inflation. They underestimated the stagnation in the UK economy and the collapse of money supply M3. Cheap Asian exports, in any case, started to influence global commodity prices.Thanks to him, made possible the low rate of inflation for 14 years, which was the longest period of uninterrupted growth in British history.
Profit taking ahead of the weekend allowed the pound to make further ground against the aussie on Friday
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.
Broad dollar weakness and an increase in demand for sterling has pushed the price back near $1.63
Sterling achieved a three-week high of 1.6297 against the dollar yesterday, supported by upbeat comments about the UK economy. The pound jumped nearly three cents, or 1.8%, against the dollar on speculation that policy makers will pause their asset-purchase programme next month as the economy shows signs of recovering from the recession. The Financial Times cited Bank of England Markets Director Paul Fisher as saying that the asset purchases scheme may be paused to give the central bank the option “of doing more later.” Analysts suggested that it appeared that the Bank of England was letting it be known in more forceful terms that it is not talking the pound down any longer.
Strong commodity prices and doubts over the UK economy allow the aussie to gain further ground
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.
The kiwi was weaker in trading yesterday following some concerning US economic data
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.
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Sterling is currently trading higher against the aussie following upbeat comments and a move to cash profits
Sterling recovered some of its recent extensive losses against the aussie dollar yesterday, climbing over two cents, to close up at 1.7668. Bank of England member, Paul Fisher, said yesterday that policy makers would be more likely to pause asset purchases in their upcoming meeting in November, giving themselves the option of “doing more later,” rather than stopping them. His comments were taken to read that the MPC is unlikely to extend their quantitative easing programme, supporting a slight rise in confidence in the UK economy, strengthening the pound. In broad terms, the aussie traded strongly against most currencies yesterday as positive economic data in the US led to investors adding to their long positions in the higher-yielding currency.
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