Focus On Bank of England
9 May, 2013
Wednesday was a decent day for the pound which, with only Halifax housing price data to go on, had a positive day. The data came out a little better than expected, but the release is far from a key one but it gave the pound the necessary to rally up across most currencies throughout the day. Against the Canadian, Aussie and US dollars there was a cent gained while against the Kiwi dollar the gain was well over 2 cents (helped by an overnight spike following some poor data from New Zealand). The Scandinavian currencies also weakened off over the day’s trade leaving just pound/euro rates with little movement.
As usual, the trading was up and down in a small range, which has been the trend for some time. The Euro was making gains against most other major currencies including the US dollar and Japanese Yen, which indicates investors were trading on the riskier side, pulling out of safe haven, low yielding currencies and buying up the riskier majors, like the pound and euro.
Focus has also been towards the Bank of England interest rate decision at lunch time today, where the consensus was widely reported yesterday, that the BoE would hold fire on any change to interest rates and the asset purchase scheme. The reason for this thinking has been the raft of better than expected UK data releases and the imminent change in Governors, as Mark Carney is set to replace Mervyn King in July.
Today is Ascension Day, with France, Germany and Switzerland all closed for business. This could give the pound a chance to make some gains against the Euro as the Euro powerhouse takes a day off. For those with an upcoming transfer, make sure to keep in touch just in case we see some opportune buying spikes. We have already had some key Australian employment data which posted much better than forecast resulting in Aussie dollar strength overnight. There is UK industrial and manufacturing production releases at 9.30am so these could give the pound the push it needs to rally, although beware a lower than forecast figure could see the gains from yesterday dramatically reverse. Then comes the BoE policy announcement at midday. US jobless claims, wholesale inventory, bond auction and a speech by one of the FED’s members over in the US round off the day.
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