Sterling Flat Ahead Of Bank of England Minutes
21 May, 2014
Tuesday was fairly quiet for sterling despite a range of inflation data and house price figures. The inflation level increased to 1.8 percent year on year from 1.6 percent last month, a greater increase than forecast. The Retail Price index actually stayed the same as last month, although a rise was forecast and the Producer Price index also fell short of expectations. Coupled with the DCLG house price index which showed house prices increased by 8 percent over the past 12 months, although analysts had expected a 10.7 percent increase.
Although good news on the whole the fact that forecasts were missed meant sterling initially dropped off against most of the major pairs but as we have seen recently, sentiment is with the pound and it managed to regain the losses over the day although traded in a fairly tight range.
The euro was under selling pressure as Erkki Liikanen, an ECB governing council member stated that if the need arose, the ECB could implement various easing measures at the next meeting, such as asset purchase, giving yet another hint that QE or rate cuts could be on the cards when the ECB meet in June.
For those looking to buy euros we are still at some of the best levels for years so it’s worth taking advantage of forward buying. This allows you to fix the rate now for settlement at a time in the future whilst only parting with a small amount of your sterling up front. Speak to one of the currency brokers at Currency Index to find out more and discuss your options whilst the rates are holding firm.
We have Bank of England minutes today along with retail sales for the UK so we could see some movement if any surprises come up in the Bank minutes or retail sales miss the mark. Both releases at 9.30am so get in touch early if you’d rather avoid the gamble. This evening we also have the US minutes from the recent Fed meeting so we could see cable movement overnight as the US markets digest any statements and before this we have comments from Janet Yellen the Fed chair who gives a speech at 4pm.
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