Modest gains for sterling
9 November, 2012
Thursday saw sterling continue its run against a basket of major currencies following the Bank of England MPC policy statement. The board decided to leave interest rates on hold and more importantly keep the bond buying program as it was. No change was expected following the GDP last week and better than expected retail sales but more recent data on services and manufacturing being below the key “contraction” figure of 50 left investors not 100 percent as to whether we would see further QE.
Despite the more than likely outcome of the decision the pound made good gains against the single currency reaching a five week high and also reversed earlier gains by the US dollar which started off the day’s trade on the rise against sterling and the Euro.
Now markets will be eager to see the minutes from the meeting, released in a fortnight, to see how the members voted, which will give a clearer idea as to if and when we might see further intervention by the Bank.
The gains by the pound were helped by the ECB after Mario Draghi indicated they had done enough with helping to solve the debt crisis stating it was now up to Spain to ask for further assistance. Monday will also be interesting as the Greeks await confirmation of a deal to secure the funding they require.
Trade balance data for the UK and CPI inflation figures for Europe with the addition of some import/export data Stateside are all we have to go on today but some volatile times ahead so keep in touch with us here at Currency Index if you have a Euro buying or selling requirement to ensure you make the most of any peaks or troughs.
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