Quiet Day For Sterling

26 February, 2015

Simon Eastman

Wednesday was fairly non-plus in terms of sterling as without any notable data to go on, we saw little movement for the pound across the major pairings.

Mortgage approvals rose more than expected but the difference wasn’t enough to give the pound a boost. Expected stat of 36,2000 actually came out at 36,400 but sterling failed to benefit. Later in the day it was over to the US for new home sales which also came in better than expected but again, little movement. The main points of call were speeches by the Feds chair Janet Yellen and ECB chief Mario Draghi. Once again Yellen commented that interest rates would not be going up any time soon, pushing the dollar lower once again, while Mario Draghi ‘s comments had little effect on rates as the deal with the Greeks, covering their debts for another month had already taken its toll. Overnight, weak private capital expenditure figures caused the Aussie to slide across all majors, losing over a cent to the pound.

This morning we have already seen euro strength as German Gfk consumer confidence survey beat forecasts at 9.7 rather than 9.5. Later we have German unemployment and EU money supply culminating with targeted LTRO (which are long term loans from the ECB to the banks to help sure them up). The take up will give an indication as to the state of the EU banking sector and the recovery as a whole, so expect some volatility depending on the results at 10.15am. Later on its stateside for Canadian inflation, US inflation, durable goods orders and unemployment data all of which have the ability to move the markets. With the recent US dollar weakness, any poor figures are likely to make it even cheaper to by the greenback, but of course nothing is certain in the fx markets so make sure to keep in touch with your CI dealer with any upcoming transfers.