BoE’s Financial Stability Report warns investors of sharp rate increase

BoE’s Financial Stability Report warns investors of sharp rate increase

Sinduja Venkat

Good morning and welcome to today’s foreign exchange market commentary on 26th of June. 

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

  • BoE’s Financial Stability Report warns investors of sharp rate increase
  • Draghi urges Eurozone governments to implement ECB reforms
  • USD on wait and watch ahead of Q1 GDP reading
  • Analyst says key to JGB stability lies in weakening Yen
  • AUD/USD unaffected by onset of Labour elections

CURRENCY RATES OVERVIEW 

GBP/EURO – 1.1789
GBP/USD – 1.5353
GBP/CHF – 1.4451
GBP/CAD – 1.6100
GBP/AUD – 1.6556
GBP/ZAR – 15.5618
GBP/JPY – 150.1095
GBP/HKD – 11.9122
GBP/NZD – 1.9742
GBP/SEK – 10.3394

Mid-market rates as of 2013-06-26 11:40 UTC

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

Australia: No Data
Europe: CHF UBS Consumption Indicator (MAY), EUR German GfK Consumer Confidence Survey (JUL), EUR French Gross Domestic Product (YoY) (1Q F), EUR ECB Draghi Speaks in Paris
United Kingdom:  GBP BoE Financial Stability Report, GBP Osborne Announces UK Government Spending
New Zealand: NZD Balance (YTD) (New Zealand dollars) (MAY), NZD Trade Balance (New Zealand dollars) (MAY)
United States of America: USD Core Personal Consumption Expenditure (QoQ) (1Q T), USD Gross Domestic Product (Annualized) (1Q T), USD Gross Domestic Product Price Index (1Q T), USD Personal Consumption (1Q T)
China: No Data
Canada: No Data
Japan: JPY Japan Buying Foreign Bonds (Yen) (JUN 21), JPY Japan Buying Foreign Stocks (Yen) (JUN 21)

BoE’s Financial Stability Report warns investors of sharp rate increase

Bank of England released its half-yearly report on Financial Stability this morning. The report has indicated that borrowers and financial institutions must remain cautious of a risk of sharp increase in interest rates. The uncertain situation in the Eurozone was also cited as a reason for investors to remain cautious as this could worsen outlook for the UK economy. Further to the findings from the report the BoE has asked the UK financial sector supervisors to assess banks’ vulnerability to elevated interest rates. Findings of this investigation are expected to be presented in September.

Draghi urges Eurozone governments to implement ECB reforms

ECB president Mario Draghi said today during his appearance in front of the lower court of parliament that so far the ECB has been making successful decisions in its bid to support the Eurozone economy despite the fact that monetary policy alone could not solve all its problems. He mentioned that the ECB’s OMT program has helped revive the markets and the lenient monetary policy has helped propel growth within the region. However he pointed out that the Eurozone governments too must show their support by implementing these reforms in order for the region to make further progress.

USD on wait and watch ahead of Q1 GDP reading

USD strengthened further during the European trading session today following positive US data being released on Tuesday. Today it is wait-and-watch as investors await the final GDP reading for Q1.

Analyst says key to JGB stability lies in weakening Yen

UBS Analyst Gareth Berry indicated today that a weaker Yen is encouraging JGB Stability. Furthermore he suggested that lower JGB yields as compared to higher sovereign yields everywhere else is important for continuing Yen weakness.

AUD/USD unaffected by onset of Labour elections

The upcoming Australian ballot for the leadership of the ruling Labor party is the biggest event on the country’s agenda for the day. AUD however has not reacted significantly to the elections story with the AUD/USD posting a slight rise above 0.9300 during today’s trading.

Going on holiday? Compare travel money deals with our sister site mytravelmoney.co.uk

0 Comments

Leave a reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>