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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 Thursday. This was against a background of poor industrial data for August and a disappointing purchasing managers index for September, although the corresponding service managers index was positive. In the event the BoE kept UK interest rates on hold and made no announcement on increasing the quantitative easing programme from its current level of £175bn [they have used £162bn so far]. The moment of truth will be their next meeting in early November when they will have further information on the UK economy and its recovery and whether or not there is a need to increase the quantitative easing programme further. I suspect they will have to and this will more than likely to be sterling negative. This week on the economic data front we have UK inflation and unemployment figures. As the rest of the world experiences deflation the UK still has inflation although it is expected to fall to 1,3% the lowest rate for five years. UK inflation seems to be the result of sterling’s weakness making imports more expensive.

 

The euro is still top of the pile and sits at €1.071/£1 inter bank. The European Central Bank met this week and kept interest rates on hold. However the ECB would like the euro to weaken as its strength is making exports too expensive. And as a consequence they expect the current deflation to take a while to turn to inflation. Will sterling hit parity against the euro? Very difficult to tell but there seems little UK news to turn the current trend around. There seems to be a dearth of euro land economic data this week so little data to upset the €’s current strength.

 

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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…

Posted September 28th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 28th September 2009

Last week got off to a quiet start with the markets waiting for the minutes of the last Bank of England meeting which were released on Wednesday. The minutes contained no surprises. The committee members agreed as one to keep the level of quantitative easing at current levels [£175bn] and there was no mention of  Continue Reading…

Posted September 21st, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 21st September 2009

Concerns regarding the health of the UK financial sector and the ‘unconventional’ monetary policy of the Bank of England re. quantitative easing continued to weigh heavily on sterling last week and  its value against all major currencies suffered. Mervyn King, Governor of the Bank of England (BoE), is approaching pantomime villain status, as far as  Continue Reading…

Posted September 14th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 14th September 2009

Sterling had a better second half to last week following the Bank of England meeting on Thursday. The market was nervous following August’s meeting when they were surprised by the BoE increasing their programme of quantitative easing by £50bn. This surprise was then compounded when the minutes of the meeting were released and it was  Continue Reading…

Posted September 7th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 7th September 2009

Last week was a better week for sterling gaining against most currencies. There wasn’t a whole lot of economic data out. The purchasing manager’s index for manufacturing fell from the prior month whereas the same survey for the services sector was positive and expanding at a faster rate than forecast. These surveys together with improved  Continue Reading…

Posted September 1st, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 1st September 2009

Sterling, which has had a bad August, lost further ground last week as the fallout from the minutes of the Bank of England’s (BoE) last meeting highlighting their intention to expand quantitive easing whatever the affect on sterling continued to rumble on. A very marginal improvement in UK GDP figures last Friday did nothing to  Continue Reading…

Posted August 24th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 24th August 2009

With few significant economic data releases during last week and a tentative air in the markets at present sterling merely continued in its downward trajectory, making marginal losses against most major currencies. However, a slight increase in risk-appetite and business confidence globally led to gains against the US$ as investors fled their safe-haven assets. The  Continue Reading…

Posted August 17th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 17th August 2009

Sterling lost ground against most currencies during the course of last week. On Wednesday we had the Bank of England’s Quarterly Information Report. This gave some background as to why the BoE had increased the amount of quantitative easing to £175bn, a major factor behind sterling’s recent fall. “The UK recession was deeper than originally  Continue Reading…

Posted August 10th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 10th August 2009

Last week all started positively for sterling with the purchasing manager indices for both manufacturing and services showing improvement and even indicating expansion as the readings headed over 50. As a result sterling strengthened against most currencies. Come Thursday mid-day it all came to a grinding halt and sterling went into fast reverse. The reason  Continue Reading…

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