Strong new orders drove the fastest expansion in China's manufacturing sector in seven months in October, a preliminary survey showed, more evidence that the economy is stabilizing although a strong rebound remains elusive.
Many will ask why strong data from China makes any difference to them…
Well China is the driving force of the global economy - the rest of the world are mere suppliers in comparison. Even in a poor year China’s economy is likely to grow by more than the value of the whole Swiss economy. As such, if Chinese data shows they are still spending then that is good for the rest of the world and that will keep investors confidence. The impact on currencies is that safe haven currencies, like USD and JPY, weaken and riskier currencies improve.
Elsewhere the Bank of Canada left the policy rate unchanged at 1.00% at its October meeting, as widely expected. However, the accompanying statement struck a more dovish tone than previously, most notably by dropping any mention of removing policy stimulus as the next policy step. Markets have now pushed out their forecast for a possible rate rise to the end of 2014/early 2015.
Looking ahead we have Mark Carney, BoE governor, speaking later today at 5.45pm. His comments are likely to impact GBP; In the past they have caused GBP to strengthen, possibly contrary to Mr Carney;s intentions.
Tomorrow with have UK GDP figures - definitely one to watch. Drop us a line if you would like more advice on how this may impact your purchase or sale of GBP.
Posted in Daily Market News on May 30 2014
Early morning trading saw GBP retract against most major currencies as the market hedged its positions pre BoE minutes. The expectations were for a unanimous vote to keep policy unchanged with the Bank Rate at 0.5% and QE at £375bn.VIEW FULL ARTICLE
Posted in Daily Market News on Oct 23 2013 by alex