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Posted August 30th, 2013 by Charles Purdy

Mark Carney’s comments help support Sterling

With the bank holiday on Monday, British markets played catch up a little when they re-opened on Tuesday and saw sterling fall ahead of Mark Carney’s first public speech since becoming governor of the bank of England. As expected, the new governor pledged to keep interest rates at record lows until the central bank saw significant improvements to the UK’s economy. Furthermore, the governor promised that even if unemployment fell below the 7% threshold, this was not an automatic trigger to raise interests rates and he went as far as suggesting the possibility of increased quantitative easing if the central bank deemed it necessary. However, investors were not convinced with his words and as such the pound made back its earlier losses – helped in part  by the governor’s plans to relax liquidity buffers for the banks which would help increase current lending levels. Sterling continued to perform relatively well yesterday on the back of optimistic views of the country’s growing economic strength. Lending data released today may cause some volatility in the market, however any significant developments in Syria will likely cause a much greater reaction in the global markets as a whole. Call your trader now for the latest price on the pound, as investors continue their reaction to these events.

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Posted August 28th, 2013 by Charles Purdy

Sterling falls before Mark Carney’s speech

After British financial markets were closed on Monday for the bank holiday and with no data for the pound out yesterday, these movements came mainly from speculation surrounding what Mark Carney’s speech later on today will reveal. Last month the Bank of England governor said that he intends to leave interest rates at record lows until unemployment falls back beneath 7% and that this would not be until at least the third quarter of 2016; however, with improving data emerging from the UK, investors are starting to doubt whether or not he will stick to his word. As this is the main event surrounding the currency for the week and due to the fact that Carney’s guidance is crucial for the currency going forward, today could well prove to be the most influential for the performance of the pound. Call your trader now for the latest price for the pound amid an important time for sterling.

Posted August 15th, 2013 by Charles Purdy

Positive announcements buoy sterling

Sterling enjoyed a strong day yesterday, making good gains against both the US dollar and the euro on the back of positive labour data and following the release of the minutes from the Bank of England’s latest meeting. The minutes reaffirmed unanimous support for keeping interest rates on hold at 0.5% and maintaining the current level of quantitative easing, however, 1 of the 9 members voted against the given forward guidance plan. The one vote against this actually supported a shorter time scale for the first inflation knock out clause. Alongside this crucial information, unemployment claims data came out better than expected, showing the number of claims had reduced by 29,000, compounding the gains for sterling. This was down to the important link between unemployment levels and future interest rate increases laid out by Mark Carney in his report last week. The wave of important data from the UK continues today, in the shape of monthly Retail Sales, so we could still see further action from the currency as the week goes on. Call your trader now to get the latest price on sterling.

Posted August 14th, 2013 by Charles Purdy

Is UK unemployment falling?

Yesterday was, for the most, another fairly flat day for sterling, before picking up speed against the euro later in the day to reach its highest level since early July. This improvement has proved to be short lived but highlighted how quickly exchange rates can move and how you have to be prepared and able to react quickly. Consumer Price Index data released in the morning did little to sterling rates, as the results came out in line with pre-release predictions and in spite of the importance laid on inflation in last week’s comments from Governor Mark Carney. Today follows the trend of crucial information for the currency this week as we will learn how the members of the Monetary Policy Committee voted on the asset purchasing and interest rate decisions. Anything less than last month’s unanimous decision to maintain current levels could weaken sterling. Moreover, we have the key unemployment data detailing the current rate of unemployment in the UK alongside the change in the number of people claiming unemployment related benefits. The new Governor the Bank of England made it clear last week that he sees an improving labour market as key sign of economic growth; furthermore, that interest rates would not be raised until unemployment falls back beneath 7% (with a few caveats) and as a result the labour data could well cause a great deal of volatility in the market. Call your trader now to get the latest price as sterling reacts to these important results.

Posted August 7th, 2013 by Charles Purdy

Good data steadies sterling ahead of Carney announcement

After a couple of good days, yesterday was a disappointing day for sterling, falling for the first time in four days against the euro, with minimal change versus the US dollar. This movement came in spite of much better than expected monthly manufacturing production data being released showing 1.9% growth when only 0.9% had been expected, as well as strong monthly industrial production data from the country. More positivity came as the National Institute of Economic and Social Research (NIESR) released figures showing that the continued recovery for the UK with growth of 0.7% in the three months to the end of July. It appears that investors are choosing to ignore the positive data and continue to act tentatively ahead of today’s message from the Governor of the Bank of England Mark Carney, alongside the inflation report. It is expected that the Governor will provide so-called “forward guidance” on interest rates and in turn if he suggests that there is no potential of an interest hike in the near future, you can expect sterling to suffer. At present, what will be said is an unknown, but you can expect volatility in the markets shortly after its release. Call your trader now to get an up to date price on Sterling on a very important day for its performance.

Posted August 1st, 2013 by Charles Purdy

Worries about today’s BoE meeting undermine sterling | 01/08/2013

The sterling slide continued yesterday as data from the British Retail Consortium showed that average retail prices have dropped for the third month in a row. The poor data in combination with a continuation of the decline in support for sterling ahead of today’s MPC statement has caused sterling to drop to a four and a half month low against the euro and a two week low against the US dollar. Whilst we are unlikely to see any change in the rate of quantitative easing or an alteration in interest rates this month, speculation is rife that the new Governor will use the meeting to provide further forward guidance with regards to how long interest rates will be kept at its historic low. Sterling has been sold off in anticipation of this move, as a result, if no such guidance is given, you would expect the trend to snap and sterling to appreciate. Call your trader now to see how the statement is received.

Posted July 29th, 2013 by Charles Purdy

Sterling faces uncertain week | 29/07/2013

Sterling experienced a fairly steady day on Friday in the absence of any real data of note being released. Looking ahead to this week, all eyes will be on Thursday as the Bank of England will meet for the second time with Mark Carney as the new Governor. Last week there was increased speculation that we could see a possible change of stance with regards to monetary policy so traders will be watching even more closely than usual. The markets will likely be nervous in the run up to the release and then we could see big moves once the Monetary Policy Committee have announced any changes or lack there of. Further commitment to keeping interest rates at 0.5% or any increased likelihood of an increase in asset-purchasing will likely cause sterling to depreciate sharply. Manufacturing Purchasing Managers Index (PMI) data is also released on Thursday before the announcement from the Bank of England so could create increased volatility first thing . We have seen moderate growth in the manufacturing sector during the last two months, however recovery has been far from convincing and this data will have an effect on faith in a sterling recovery. Finally, Construction Purchasing Managers Index figures will be released on Friday and have a similar capacity to affect performance. Call in now to see how market chatter affects the pound ahead of key releases on Thursday.

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