PMI Knocks Sterling Again Ahead Of Policy Meetings
4 October, 2012
Wednesday saw the release of the UK Services PMI data, important as a key indicator of the economy’s health. Any reading over 50 shows expansion (under 50 contraction) in the services industry and therefore the economy but although the figure of 52.2 was above this it was less than expected, forecast at 53, and down from last month’s 53.7. This shows PMI is going the wrong way towards contraction, not a good sign when we are trying to dig ourselves out of recession. The pound, as a result tumbled back against the Euro and US dollar, losing half a cent against both.
Today, markets will have their eyes and ears on the Bank of England at noon and the ECB 45 minutes later to see if any changes have been decided for monetary policy. Both are expected to show no change to interest rates and QE but nothing is a given these days as we have seen in the past. More importantly for traders will be the press conference Mario Draghi gives after the meeting (around 1.30pm UK time) where he will answer questions on Spain and Greece and what the ECB plans to do about tackling the Euro crisis, the key driver behind worldwide issues economically at present and the main mover of exchange rates. With this in mind it would be prudent to expect some volatility this afternoon.
Later in the day the US releases the minutes for its latest FED budget meeting where they introduced a further round of QE, subsequently leading to the recent dollar weakness we saw. It will be interesting to see the motives for the decision and any hint at future policy. Dependant on how the markets take the minutes will dictate where the Dollar, Euro and Pound head next.
If you aren’t a gambler but have a currency transfer to make imminently speak to one of the brokers here to secure your funds in the morning or for those with a longer term requirement chat through the options for securing the rate now for delivery in the future. Forward buying has saved many clients thousands over these turbulent times and having entered the last quarter of the year, completions towards the end of the year can be subject to volatility in thin December trade.
Some good news for those moving down under was the surprise interest rate cut by the Reserve Bank of Australia the other night, leading to a two cent dip for the Aussie, giving you more when sending money to Australia. Retail sales out overnight have pushed the rates for buying the Aussie to the best they have been for 4 months. As a fellow commodity based currency the Aussie weakness took the Kiwi with it adding two cents also for those sending money to New Zealand.
- 2020 (59)
- 2019 (190)
- 2018 (229)
- 2017 (253)
- 2016 (254)
- 2015 (253)
- 2014 (252)
- 2013 (287)
- 2012 (270)
- 2011 (576)
- Brexit deal to be done, or going, going, gone? 25 November, 2020
- Sterling starts the week down from the highs of last week 16 November, 2020
- Votes are in – albeit still being counted, will Donald trump Joe? 4 November, 2020
- No categories