Are you following the current Sterling High? Here is your latest Currency Report: Sterling has a good week Sterling started the week strongly, rising close to a four month high versus the euro thanks to strong manufacturing, construction and services data which surpassed expectations. The multitude of positive data shows the growing health of the economy, such to the extent that the Organisation for Economic Co-operation and Development (OECD) raised the UK’s growth forecast from 0.8 to 1.5%. The more confident people become about the economy, the more speculation there will be as to the timeline for when the Bank of England (BoE) may hike interest rates. Yesterday saw sterling experience slightly more mixed fortunes, weakening over the day versus the US dollar, whilst managing to touch the highest point in four months against the euro following the Bank of England’s decision to keep quantitative easing and interest rates at their current levels. The major release out of the UK today is the manufacturing production figures, although employment related data released in the US may have a greater bearing on sterling’s relative strength . Euro falls on poor data and possible interest rate cuts The euro has been on a slippery slope this week and has seen little respite in its slide against major peers. Last week we saw a lot of data from Germany, whereas this week we had a variety of data from the Eurozone’s other major economies. The data was mixed with the majority coming through worse than expected, this was in contrast to the more consistent economic indicators seen in the UK and the US. Thursday’s ECB rate statement and president Mario Draghi’s subsequent speech caused the seventeen-nation currency to weaken further as he discussed a further interest rate cut. This caused the euro to reach six-week lows against the US dollar and extended three-month lows against sterling yesterday. After an extended period of depreciation the euro is still looking for some support to kick in. Today we have German trade balance data and monthly manufacturing figures coming through, which may have some bearing on performance in the short term, but continued appreciation may prove to be illusive until we see some more consistent data. goldacreestates/Finance
Posted on: Fri, 06 Sep 2013 09:17:17 +0000
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