Yesterday saw BoE Governor, Mark Carney, speak before the Treasury Select Committee where he was seen to state that the currently low level of inflation is related to the depressed oil prices we’ve seen this year. This did contribute towards a drop for GBP to 1.4112 against EUR, and we even saw the BoE’s Chief Economist state that there might even be a cut in the interest rate because of weak inflation and global economic conditions. With GBP having made big gains against the commodity currencies at the start of the year, the pressure has been applied to low inflation levels – one knock-on effect being lowered exports. The close relationship with a struggling Europe has been an issue, too, in terms of weakened trade.
In Europe, Germany’s GDP came in as expected at 0.3%, which is coupled by the positive manufacturing and services data wesaw on Monday. IFO business climate data was also strong there, adding to positive sentiment and overall optimism, when it came in at 109 instead of the predicted 108.3. With there being renewed talk of furthering ECB quantitative easing, will Germany’s performance put the brakes on increased/prolonged QE?
In the States yesterday, we saw house prices improve and Q3 GDP figures revised from 1.5% to 2.1%, while personal consumption numbers were seen to drop and last month’s trade balance and exports declined. Consumer confidence was seen to drop-off as well for this month. Despite this mixed situation, it is still widely thought that the Fed will raise interest rates next month. Overall, the dollar looked good against the pound as it hit 1.5052 yesterday.
In terms of data today, we’ll see durable goods orders for last month, along with initial jobless claims and both Markit services PMI and PMI composite readings.
FC Exchange is a trading name of Foreign Currency Exchange Limited. Registered office: Salisbury House, Finsbury Circus, London, EC2M 5QQ. Registered No.5452483. Authorised by the Financial Conduct Authority (No.511266) under the Payment Service Regulations 2009 for the provision of payment services. HM Revenue & Customs MLR No.12215508. Copyright © 2013 Foreign Currency Exchange. All Rights Reserved.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.