GDP rises to pre recession levels
29 January, 2014
Yesterday we saw the markets reaction to UK GDP release which came out the highest level since August 2008, coming in at the forecast 2.8%. Surprisingly, sterling took very little from the news assuming the markets had firstly priced in the expectation and secondly, possibly hoped for the figure to be a little better. Either way, sterling initially made some small gains across the board but over the course of the day didnt really make further gains to the levels we have seen the rest of this week against the majors.
That aside, we are at exceptional levels against the USD which is broadly weak across the board, even against the struggling single currency euro. The one currency the dollar does seem to be able to make ground against, along with every other currency in the world is the Turkish Lira. We have seen this struggling for some time now as unrest in country builds and the currency has been in free fall. It has moved some 18 percent since the end of last year, with some major daily movements happening this past week. Just in the last 48 hours the Lira has swung across 9 percent up and down and with central bank intervention last night where they pushed up interest rates further to try and strengthen the Lira, we saw a 4.6 percent movement in the Liras favour. So the intervention did its job, but with many concerned about the country and the Lira, many expats are looking to move their funds out of the high yielding interest accounts (which have just got better) and repatriate the funds, often with great difficulty. Worrying times but if you have a Lira requirement, the levels for buying are certainly attractive and for those looking o sell Lira, they are much better that a few days ago!
Today we have already had UK house price data showing a better than expected increase. We await EU money supply figures and a key speech from BoE governor Mark Carney at lunch time. Later this evening the Fed Reserve give their interest rate decision and subsequent policy statement and overnight the down under the New Zealand central bank give their interest rate decision.
So tomorrow we could have seen plenty of movement so make sure to stay in touch with your broker here at Currency Index to keep abreast of the markets.
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