Daily market report Pound Slides Third Day Versus Euro Before BOE’s Carney Testimony - Strong Euro to Cut Region’s 2014 Growth The pound fell for a third day versus the euro before Bank of England Governor Mark Carney testifies before parliament’s Treasury Committee. Sterling was little changed against the dollar as analysts said a report tomorrow will show the U.K. economy expanded for a third quarter in the three months through September. The committee will question Carney, Deputy Governor Charlie Bean, Chief Economist Spencer Dale and policy maker Ben Broadbent about the quarterly Inflation Report and the central bank’s new economic forecasts. The pound weakened 0.1 percent to 83.78 pence per euro at 7:44 a.m. London time after dropping 0.5 percent in the previous two days. Sterling traded at $1.6167 after climbing to $1.6240 yesterday, the highest since Oct. 25. The Bank of England published its quarterly Inflation Report on Nov. 13. Sterling rose 1 percent versus the dollar and 0.6 percent against the euro on that day as the central bank signaled policy makers may consider increasing interest rates sooner than they previously forecast as the economy improves. Britain’s gross domestic product rose 0.8 percent in the third quarter after growing 0.7 percent in the previous three months, according to a Bloomberg News survey of economists before tomorrow’s data. That would confirm a report released on Oct. 25. The euro, the second best-performing major currency this year, has increased so much that it will weigh on economic growth in the euro region going into 2014. The strength of the 17-nation shared currency, which has increased 2.4 percent versus the dollar year-to-date, the most after Denmark’s krone, will trim euro area growth by 0.5 percent in 2014, said Nordvig. The shared currency was the fifth-worst performer among the greenback’s 16 most-traded counterparts in 2012. The euro depreciated 0.4 percent to $1.3508 at 12:19 p.m. in New York after earlier falling as much as 0.5 percent. The shared currency rose to $1.3832 on Oct. 25, its highest level since November 2011. Europe’s currency climbed to a four-year high against the yen on Nov. 19 after a European Central Bank board member said policy makers must be “very careful” about using negative interest rates to counter low inflation. The ECB is the only major central bank that hasn’t entertained the idea of quantitative easing, which means it has to consider different ways to come across as dovish in order to stem the rise in the euro. Have a good day!
Posted on: Tue, 26 Nov 2013 09:10:18 +0000
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