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Posted October 26th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 26th October 2009

A difficult week for sterling last week. It started well when the minutes of the last meeting of the Bank of England’s monetary policy committee showed a unanimous vote to keep their quantitative easing programme at current levels. This helped sterling gain against most currencies and at one stage sterling hit €1.11/£1. However there was a sting in the tail on Friday when the economic data showed that the UK economy had shrunk by 0.4% in the third quarter. This is the sixth quarter of contraction and highlights why the Governor of the BoE has been so cautious in his statements on the UK economy. Sterling went into immediate freefall although its net movement over the course of the week was limited given its good start to the week. Still a long road until the UK economy to turns the corner and until then sterling will have few friends. There is limited economic data out this week with mortgage lending data for September due on Thursday and some preliminary data on sales, house prices and consumer confidence released throughout the week.

 

The euro currently sits at €1.083/£1 inter bank. In Euro land economic data for last week was good with positive figures for both the Purchasing Managers and Service indices. This supports the view that we will have seen positive growth in the last quarter from the economy. Still plenty of spare capacity which will mean that we are unlikely to see inflation in the near term and as such we will see interest rates kept low for some time. This weeks data focuses on preliminary feedback of consumer and business confidence for October and some firm data for September on unemployment and  retail sales. In the short term there seems very few reasons to believe that the euro will begin to weaken.

 

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Posted October 19th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 19th October 2009

A better week for sterling last week. It started off badly with sterling hitting a six month low against the euro. This was on the back of the rate of inflation for September being under expectations at 1.1% [August 1.6%]. I must admit I do wonder why there is inflation rather than deflation but I  Continue Reading…

Posted October 12th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 5th October 2009

Last week was one of those weeks where a lot seemed to be happening but sterling marked time against the US$ and the €. But not when compared to the commodity backed currencies against which sterling lost significant ground. This followed the Bank of Australia raising their interest rate. The Bank of England met on  Continue Reading…

Posted October 5th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 5th October 2009

A quiet week for sterling last week. No statements from the Governor of the Bank of England or negative economic data to undermine sterling. In fact the economic news was on the whole positive with improving house prices, retail sales and industrial sentiment. However this improvement is only gradual and similar to that enjoyed being  Continue Reading…

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