News

UK inflation stays at 4.5%

28 July, 2011

CurrencyIndex

Sterling has fallen back this morning after inflation figures showed ‘no change’ in May at 4.5%.

High inflation has been one of the main arguments for raising UK interest rates, and the Bank of England expects inflation to go up further throughout the summer. This morning’s figures were lower than expected, and coupled with Halifax’s announcement this morning that May house prices were 4.2% lower than a year ago, the Pound has started to lose value again.

Currency news this week 36

28 July, 2011

CurrencyIndex

This week’s economic calendar is below, and in the UK we have 3 main releases: inflation, unemployment and retail sales, at 9.30 each morning from Tuesday to Thursday.

Each of these has the potential to impact the value of sterling.

Retail sales & inflation are also due out in the USA, and inflation in Europe, so we could see some volatility this week in GBP-EUR and GBP-USD. Call Currency Index on 0800 043 2623 for the latest rates and news.

Monday 13th
No major data

Tuesday 14th
Overnight – UK consumer confidence & RICS house price balance
0930 – UK inflation (RPI & CPI)
1330 – US retail sales
2345 – New Zealand retail sales

Wednesday 15th
0930 – UK unemployment rate
1000 – Eurozone industrial production
1330 – US inflation (CPI)

Thursday 16th
0830 – Swiss interest rate decision
0930 – UK retail sales
1000 – Eurozone inflation (CPI)

Friday 17th
0900 – ECB monthly report
1000 – Eurozone trade balance

Europe and UK keep interest rates on hold

28 July, 2011

CurrencyIndex

Both today’s interest rate decisions, in the UK and Eurozone, were ‘no change’ as expected. The Bank of England is widely tipped to keep interest rates on hold until late 2011, while the European Central Bank may raise rates further in the summer.

European Central Bank Trichet, in the accompanying press conference, again states “strong vigilance” was warranted, which is taken to mean that European interest rates could well be increased to stave off inflation over the summer.

Higher interest rates tend to make a currency more expensive, so the cost of exchanging sterling to Euros might be likely to increase if analysts start to ‘price in’ Eurozone interest rate rises before we see any in the UK.

For further analysis please see Reuters or call us at Currency Index (0800 043 2623) for the latest views and live rates.

This week’s currency news 38

28 July, 2011

CurrencyIndex

This week sees the monthly round of interest rate decisions in the UK, Europe, New Zealand and Australia. Rates are expected to remain on hold in the UK for several more months, so any other currencies where interest rates start to rise further will probably gain momentum, leaving their currencies more expensive.

We also have the UK trade balance out on Thursday, but little else to potentially give the Pound a boost. Releases due out around the world are listed below.

Monday 6th
1000 – Eurozone PPI inflation

Tuesday 7th
0530 – Australian interest rate decision
1000 – Eurozone retail sales

Wednesday 8th
1000 – Eurozone GDP
2200 – New Zealand interest rate decision

Thursday 9th
0230 – Australian unemployment rate
0930 – UK trade balance
1200 – UK interest rate decision
1245 – Eurozone interest rate decision
1330 – US trade balance

Friday 10th
0930 – UK industrial & production manufacturing
1200 – Canadian unemployment rate
1530 – UK GDP estimate

Manufacturing, mortgages and money supply all fall

28 July, 2011

CurrencyIndex

Sterling fell this morning on 3 worse-than-expected data releases in the UK. Mortgage approvals fell to 45,000 in April, signalling more problems in the housing market, while manufacturing growth fell and the measure of money supply in the economy was also below expectations.

There is not much else due out this week in terms of UK data, so the Pound may struggle to recover much ground. Exchange rates fell nearly a cent against the Euro and US Dollar this morning.

Currency news this week 40

28 July, 2011

CurrencyIndex

After the long weekend we have a mixed bag of news releases scheduled this week, with the only main UK figures being mortgage approvals and services & manufacturing growth.

There are various other pieces of news due around the world, with the details below of anything likely to affect exchange rates in each country. Contact us at Currency Index for the latest news and live rates.

Monday 30th
1330 – Canadian GDP

Tuesday 31st
0200 – New Zealand business confidence
0230 – Australian current account
0645 – Swiss GDP
0700 – German retail sales
0855 – German unemployment rate
1000 – Eurozone CPI inflation & unemployment rate
1400 – Canadian interest rate decision

Wednesday 1st
0230 – Australian GDP
0930 – UK mortgage approvals & PMI manufacturing

Thursday 2nd
0230 – Australian trade balance
1500 – US factory orders

Friday 3rd
0930 – UK PMI services
1330 – US unemployment rate & non-farm payrolls

GDP unchanged

28 July, 2011

CurrencyIndex

This morning’s revision to the first quarter UK GDP showed no change from the 0.5% first estimate, meaning the UK economy had not grown at all in the 6 months to the end of March.

While a downward revision would have caused trouble for the Pound, there has been little impact from the figures this morning, although we have seen rates for buying USD spike up by nearly 0.5c

UK public borrowing hits record high

28 July, 2011

CurrencyIndex

This morning’s public borrowing figures showed the worst April on record with a net public borrowing figure of £7.71bn. Analysts had expected a figure nearer £4bn, so fears have grown that the UK economy is still far from a sustainable road to recovery.

The Pound fell sharply on the news, and now tomorrow’s GDP revision is even more critical, as any further disappointing data will be likely to weigh strongly on sterling. The GDP revision is published at 9.30am tomorrow.

Currency news this week 43

28 July, 2011

CurrencyIndex

This week’s main news will be Wednesday’s adjustment to UK GDP. Any improvement on the previous estimate of 0.5% growth in Q1 will likely be positive for the Pound, while any revision downwards would have a negative effect on sterling.

Monday 23rd
0900 – Eurozone manufacturing & services PMI

Tuesday 24th
0400 – New Zealand inflation report
0700 – German GDP
0930 – UK public borrowing
1500 – US home sales

Wednesday 25th
0930 – UK GDP
1330 – US durable goods orders

Thursday 26th
0715 – Swiss trade balance
1020 – Speech: European Central Bank President Trichet

Friday 27th
Overnight – UK consumer confidence
1330 – US personal income & expenditure

Retail sales better than expected

28 July, 2011

CurrencyIndex

This morning’s UK retail sales figures were better than expected, showing a 2.8% increase in the 12 months to April.

Sterling found some strength this morning, and combined with weak US manufacturing numbers this afternoon, has recovered nearly a cent against the US Dollar.

Unfortunately the Euro had a rally of its own during the afternoon, leaving rates for buying Euros back where they started at the beginning of the day.

With little important data out tomorrow (except in Canada), we are not expecting any improvements in the outloook for sterling this week.