Undoubtedly today’s events will be dominated by the release of the US GDP figures. Consensus forecasts expect annualised growth of 3.5% with any substantial deviation from this figure having the potential to cause USD volatility with other major currencies. The significant movements by the GBP experienced earlier this week after the shock GDP figures are testament to this.
In the UK there are no new releases of data today. However, it is worth pointing out the contrasting sentiments of the Bank of England’s Governor and the ECB president in recent days. After Eddie George’s relative dovish comments earlier in the week ECB president Jean- Claude Trichet has taken a far more hawkish stance pledging to "do what is necessary" to keep prices stable. These comments follow yesterday’s preliminary data releases on German headline inflation showing it at its highest level since 2008. In yesterday’s trading, this provided support for the single currency with it reaching two month highs against the US Dollar and Japanese Yen.
EMU M3 money supply realised today, which is considered a useful inflation indicator, should provide further insight into inflationary pressures in the euro zone. If the ECB were to raise rates quicker than the BOE this has the potential to weigh on the GBP against the EUR although it is worth pointing out that the Euro zone sovereign debt crisis has still not been fully extinguished.
Posted in Daily Market News on May 30 2014
Sterling has managed to claw back some of the losses it made following the shocking GDP data on Tuesday. This was helped on part by the release of the minutes from the last Bank of England policy decision which showed another member had joined Andrew Sentance in calling for a...VIEW FULL ARTICLE
Posted in Daily Market News on Jan 27 2011 by admin