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Posted November 30th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 30th November 2009

Some ups and downs for sterling last week. We had a slight revision upwards of the growth figures for the UK economy in the third quarter. But instead of growth we were still seeing the UK economy contract. The belief is that we will see the economy grow in the current quarter and the Bank of England has forecast growth of 2.2% in 2010 and 4.1% in 2011. But as highlighted by the Chairman of the BoE this is off a low base and the current recovery was not particularly strong and is subject to some profound challenges ongoing. And it has to be remembered that the BoE will at some point in time have to raise UK interest rates and have to sell the bonds that it has bought as part of its quantitative easing programme back to the market. But given the current problems this will not be for quite a while. This week we have the release of Novembers purchasing indices for both manufacturing and services and the expectation is for an increase.

 

The euro zone continues to see its economy recover and the euro sits at €1.098/£1 inter bank. Both the purchasing managers’ indices for manufacturing and services for the euro zone continue to increase and are running well ahead of the level seen in the third quarter. Sterling lost value on the back of the problems in Dubai and the increase in risk aversion. But the €/£ exchange rate continues to move in a fairly narrow arrange so we wait to see a clear direction. This week we have the release of Novembers purchasing indices for both manufacturing and services and the expectation is for an increase. We also have the European Central Bank meeting and the expectation is that interest rates will be kept on hold, that they upgrade there growth figures for 2010 and that the withdrawal of the one year financing option that was brought in as an emergency lending facility.

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Posted November 23rd, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 23rd November 2009

Sterling is moving in a fairly narrow range against a wide range of currencies. It is the speed of movement between the extremes of this narrow range which makes it difficult to assess when best to do a transaction. The key UK releases of last week were firstly the Bank of England minutes and secondly  Continue Reading…

Posted November 16th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 16th November 2009

Sterling had a mixed week last week, holding its own against the €, gaining against the US$ and losing ground against the commodity backed currencies. Mid week the Bank of England released its quarterly inflation report which showed that inflation was unlikely to reach the target rate of 2% for a number of years. The  Continue Reading…

Posted November 9th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 9th November 2009

Sterling held its own last week as the week revolved around the meetings of the various central banks. In the UK the Bank of England kept interest rates on hold which was as expected. But the BoE did increase their programme of quantitative easing by £25bn to £200bn. From past experience this should have led  Continue Reading…

Posted November 2nd, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 2nd November 2009

Sterling had a good week gaining ground against most other currencies. A few reasons for this. Firstly a recovery from what is viewed as an over reaction by the market to poor UK gross domestic figures on the previous Friday. Secondly the UK data last week was reasonably positive with increasing house prices and improving  Continue Reading…

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