Sterling fell vs the US Dollar yesterday as better than expected US data triggered selling pressure on GBP/USD. Yesterday’s encouraging US Durable Goods Data and far stronger than anticipated US Gross Domestic Product data has seemingly hastened the timing of the next Federal Reserve interest rate hike. Analysts had been anticipating the year-on-year figure at 2.3% from the headline number - the actual result of the annualised GDP came out at 3.1% helped strengthen the Greenback throughout yesterday afternoon.
It would seem that most market participants took the number as a genuine thumbs up for the Fed to tolerate a tightening of policy this year; many analysts are now forecasting the United States interest rate hike could take place as soon as next month.
Elsewhere, risk appetite was in go-ahead mood yesterday even before the US data was released. This was thanks to a widespread improvement for global stock markets. China’s benchmark SSE Composite index, being the basis of much of this week’s flight to safe-haven assets, closed the gap by over 5% in last night’s trading. European markets followed suit, with the FTSE 100 trading up by over 3% shortly before the close.
The move back into risk-laden assets from investors has seen the Pound Sterling incur significant losses on the day against commodity-based currencies such as NZD and AUD with GBP/AUD and GBP/NZD pulling back significantly.
Posted in Daily Market News on Aug 28 2015
Sterling struggled yesterday versus the US Dollar as investors retrieved their collective nerve. The UK continued to be weighed down heavily by market participants with expectations that, given the fears over the Chinese economy, the Bank of England could be up to a year away from an interest rate hike.VIEW FULL ARTICLE
Posted in Daily Market News on Aug 27 2015 by William Kemp