Focus on US and UK GDP figures – nervous times for Pound
26 November, 2014
All eyes yesterday were firmly fixed on the UK as the morning saw the inflation report hearing. With many fearing further GBP weakness as it is the slow-down in inflation that is causing the delay to interest rate hikes, the markets were braced for further GBP losses. However following the report we saw little movement in the GBP major crosses, and in particular against EUR remained relatively stable throughout the day’s trading. This could be largely due to the fact that much of the perceived weakness has been priced in, or given that the single currency has an underlying weakness of further Q.E and a potential triple-dip recession.
The USD saw a slight weakening during the mornings trading following Mondays afternoons release showing Markit Services PMI data came in under expectation – down to 56.3 from a predicted 56.8. As a result we saw USD slip slightly against both GBP and EUR, however this was short lived as the U.S posted a growth in GDP figures in the afternoon. A report of much greater impact, annualized GDP rose to 3.9% from a predicted 3.3% – an impressive figure. Consequently the USD continued its current onslaught and by the end of trading had all but for a few pips clawed back the previous day’s losses.
Today the focus remains on GBP and USD as we have UK GDP figures this morning, and a raft of US data including durable goods orders this afternoon. Certainly with the current slightly unstable nature of the pound, and equally the strength of the USD it will be an interesting day for major crosses. Those of you with upcoming EUR or USD purchases would be well advised though to get in touch with your Currency Index broker asap. With ongoing GBP weakness and uncertainty over interest rate increases the pound is struggling. Against the strong USD given the current weakness we could see rates drop rapidly over the coming weeks. And whilst we have seen a slight increase in GBP/EUR rates this is in part due to fears over further ECB Q.E measures. But, until these are announced and Mario Draghi continues to merely “threaten” them it is likely we will see buying Euro rates slowly erode.
So speak to your C.I broker today for some friendly and professional guidance on how to get the most out of your transfer – Currency Index can help you stay well informed and well ahead of the market.
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