All eyes tuned to BoE’s rate decisions, Sterling up for action

All eyes tuned to BoE’s rate decisions, Sterling up for action

Sinduja Venkat Google +

Good morning and welcome to today’s foreign exchange market commentary on Thursday, the 9th of May. 

Here are MyCurrencyTransfer.com’s top 5 currency highlights:

  • Sterling up for action as BoE gets set to announce rate decision
  • AUD finally rallies on Strong Jobs Report
  • Euro strengthens amidst talks of Stimulus Support
  • Wall Street upbeat on strong German data
  • Asian markets retreat after China posts inflation

CURRENCY RATES OVERVIEW 

GBP/EURO – 1.1807
GBP/USD – 1.5536
GBP/CHF – 1.4521
GBP/CAD – 1.5572
GBP/AUD – 1.5184
GBP/ZAR – 13.9637
GBP/JPY – 153.0714
GBP/HKD – 12.0559  
GBP/NZD – 1.8385
GBP/SEK – 10.1009

Mid-market rates as of 2013-05-09 04:43 UTC

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Key releases in the next 24 hours that may affect currency date:

Australia: No Data
Europe: EUR ECB Publishes Monthly Report
United Kingdom: GBP Industrial Production (YoY) (MAR), GBP Manufacturing Production (YoY) (MAR), GBP Bank of England Rate Decision (MAY 9), GBP BOE Asset Purchase Target (MAY), GBP NIESR Gross Domestic Product Estimate (APR)
New Zealand: NZD Unemployment Rate (1Q), NZD Employment Change (QoQ) (1Q), NZD Employment Change (YoY) (1Q)
United States of America: USD Wholesale Inventories (MAR), USD Initial Jobless Claims (MAY 4)
China: No Data
Canada: CAD New Housing Price Index (YoY) (MAR)
Japan: JPY Trade Balance – BOP Basis (Yen) (MAR), JPY Bank Lending including Trusts (YoY) (APR)

Sterling up for action as BoE gets set to announce rate decision

The Sterling closed 41 pips higher yesterday at 1.5541 ahead of today’s busy trading session with UK’s Industrial Production and Manufacturing Production data due earlier following which all eyes will be tuned to Bank of England’s decisions on interest rates and stimulus measures which are due before midday.

In the past weeks UK has been able to post promising PMI figures for the construction, manufacturing, and services sectors. Data Reports that have medium impact including housing related data have also posted a good showing. Analysts expect that BoE will leave the current monetary policy virtually unchanged as there have been signs of economic resilience despite the austerity of the policy measures.

In the past week the trend observed among several central banks including European Central Bank (ECB), Reserve Bank of Australia (RBA) and South Korea’s central bank, has been one of rate cuts. Globally there have been efforts to inject support into the financial system to stimulate growth. The UK as a country still risks facing a  triple dip recession and is vulnerable to events in the Eurozone. Given the environmental factors market participants expect that the BoE will give in to pressure and sanction a stimulus programme.

AUD finally rallies on Strong Jobs Report

AUD plummeted this morning following employment figures for the month of April. Net jobs change was at  50,100 – a position that is five times more than the levels forecasted. Furthermore this rise in employment levels was based on full-time positions increasing and was accompanied by a decline in unemployment rate.

Euro strengthens amidst talks of Stimulus Support

The EUR/USD increased from 1.3000 following strong German factory reports data. Post ECB rate cuts last week there has been concern that the economic easing policies that would be enacted would do little to benefit the Euro other than succeeding in curbing inflation. However the ECB will now go further according to a report from Die Welt, and purchase Asset Backed Securities (ABS) to inject money to SMEs. EUR/GBP pair transits session lows today. The pair is now trading at 0.840 being dragged done by the renewed strength in the sterling and the resilience of the single currency.

Wall Street upbeat on strong German data

US markets closed higher on Wednesday as market participants remained confident following upbeat Germany industrial production data and the jump in the MBA mortgages. Dow Jones and S&P500 closed at record highs for the fifth consecutive trading session.

Asian markets retreat after China posts inflation

Chinese data indicated higher inflation with CPI (MoM and YoY) increasing by 0.2% and 2.4% respectively in the month of April. Nikkei 225 was trading in the red at 14191.48, descending by 94.21 points while Hang Seng Index also traded in the negative at 23197.10, posting a decline of 39.63 points.

 

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