Good morning and welcome to today’s foreign exchange market commentary on 10th of May.
Here are MyCurrencyTransfer.com’s top 5 currency highlights:
- BoE decision on stimulus, rate to remain unchanged
- G7 finance ministers to discuss banking reforms
- Euro gives in to selling pressure on weak growth forecasts
- Greenback continues rally against all peers
- USD/JPY breaches 100.00, Nikkei prints fresh 5-year high
CURRENCY RATES OVERVIEW
GBP/EURO – 1.1833
GBP/USD – 1.5402
GBP/CHF – 1.4716
GBP/CAD – 1.5538
GBP/AUD – 1.5329
GBP/ZAR – 13.9360
GBP/JPY – 155.9190
GBP/HKD – 11.9525
GBP/NZD – 1.8456
GBP/SEK – 10.1192
Mid-market rates as of 2013-05-10 09:39 UTC
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Key releases in the next 24 hours that may affect currency date:
Australia: No Data
Europe: EUR ECB Announces 3-Year LTRO Repayment
United Kingdom: GBP Construction Output (YoY) (MAR), GBP Visible Trade Balance (Pounds) (MAR), GBP G7 Finance Ministers, Central Bank Chiefs, Meet in UK
New Zealand: No Data
United States of America: USD Monthly Budget Statement (APR)
China: CNY New Yuan Loans (APR)
Canada: Full Time Employment Change (APR), CAD Unemployment Rate (APR), CAD Net Change in Employment (APR)
Japan: No Data
BoE decision on stimulus, rate to remain unchanged
The Bank of England yesterday decided to keep its stimulus programme unchanged putting easing of fiscal conditions on hold. Interest rates were also capped at 0.5% as before. This was a decision that was expected by most. It is expected that BoE’s new governor Mark Carney will assume his post in July and there will be little or no policy changes until this date. The first quarter UK GDP figures posted growth of 0.3% and this is being cited by many as a reason for BoE to not go ahead with a new stimulus plan for the economy.
UK’s Industrial and Manufacturing data released yesterday also beat expectations. Following this, the sterling registered gains against most of its peers
G7 finance ministers to discuss banking reforms
G7 finance ministers and central bank chiefs are due to meet today in the UK to discuss ways of stimulating growth, following difference in opinion between Europe and the US on the pace of implementing austerity measures. The US supports boosting demand and employment but doesn’t believe further stimulus measures will solve this problem while Europe believes otherwise. UK Chancellor Osbourne released a statement earlier on saying that this meeting was an opportunity to consider the extent to which further monetary easing programmes can be carried out to support economic recovery in the Eurozone.
Euro gives in to selling pressure on weak growth forecasts
Following the release of its monthly report by the European Central Bank which saw the ECB lower its growth forecasts for the year to -0.4%, the Euro failed to perform yesterday. Selling pressure on the euro pushed the Pound to euro exchange rate up to as much as 1.1855.
Greenback continues rally against all peers
The USD advanced against all its peers and traded higher on Thursday. This momentum was fuelled by rising US yields, improved weekly employment figures weekly basis as well as hopes of Fed’s go ahead for a quantitative easing programme. USD/JPY pair shot up above the 100.00 level easily yesterday and ended its rally at 102.29.
USD/JPY breaches 100.00, Nikkei prints fresh 5-year high
Japanese Nikkei rallied ahead to new highs following the USD/JPY boost at over 100.00. The Asian session saw consolidation of recent USD gains to end the week as the Yen sold out owing to Nikkei’s continued advance at above the 14600 points figure as well as higher levels of foreign bond purchases from Japan than observed previously.