www.currencyline.co.uk

By Colm Gilhooly

Revised US GDP data yesterday was a little less robust than some analysts had hoped although the Dollar did strengthen against Sterling as a result.  However, initial  jobless claims rose by more than 50,000 more than expected in the US which will make Friday’s non farm payrolls data all the more interesting.  If the expectations here have also underestimated the number of jobs lost outside the agricultural sector, then Friday afternoon could see some Dollar weakness.  So as you can see, US jobs data is key to the short term Cable exchange rates.

By Colm Gilhooly

Sterling has rallied against all major currencies this morning following a much better than expected CBI survey.  Given all the Pressure on the Pound recently due to the dire state of the UK economy, this spike may be short lived, so if you are buying Dollars, Euros or any other currency for that matter then it may be worth getting in touch today!

By Colm Gilhooly

Sterling is at a 4 month low against the Euro and has lost a huge amount of ground against all major currencies following Mervyn Kings recent comments refusing to rule out out further Quantitative Easing (”printing money”) as a means of getting the UK economy out of recession. He also mentioned he may cut the rate of interest paid on deposits the UK banks have with the Bank of England to force them to move the money elsewhere to get better returns and as a result stimulate credit conditions. With levels of national debt now at gargantuan proportions it seems difficult to see any support for Sterling in the short term so a lot of focus will move towards the upcoming B of E minutes to see if further Q E is indeed on the cards, or whether the recent fears for the Pound have been overstated. As such Wednesday could be a very important day until the next rate meeting in October.

By Colm Gilhooly

German GDP figures released this morning showed an encouraging flicker of growth for the last quarter- up 0.3% against an expected downturn of 0.2%.  Whilst the figures for the year are still massively down for Europe’s biggest economy, the data has helped the Euro maintain its recent levels against Sterling.  With European GDP figures as a whole due out within the hour it will be interesting to see how the Single Currency fares against the pound following this.  Are these the signs of economic recovery for Europe, or is it a false dawn?

By Colm Gilhooly

With markets more positive about global growth forecasts the Dollar has begun to slide as risk appetite grows and the greenback has been losing its “safe-haven” status.  The pound rose to a 10 month high against the USD on the back of profit announcements from the UK banking sector, and much better than expected figures for UK manufacturing.

The banking profit news caused a surge in share prices on the FTSE and Sterling benefitted as a result.  Although the manufacturing growth was only modest, it was much better than the forecast contraction and is the first positive reading since March 2008.

The pound was assisted against the Dollar by rising oil costs on the back of global growth and demand forecasts.  With a raft of data out this week, including the Bank of England interest rate decision, core consumer personal consumption in the US and the non farms payroll data on Friday it will be interesting to see if Cable will break through the 1.70 and beyond.