GBP near term weakness ahead of BoE policy meet

GBP near term weakness ahead of BoE policy meet

Sinduja Venkat

Good morning and welcome to today’s foreign exchange market commentary on 17th of July. 

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

  • GBP near term weakness ahead of BoE policy meet
  • EUR/USD rallies on disappointing US data
  • Bernanke leaves doors open on QE policy
  • USD rallies against JPY post Bernanke comments.
  • Australian Business Confidence dips in June

CURRENCY RATES OVERVIEW 

GBP/EURO – 1.1504
GBP/USD – 1.5117
GBP/CHF – 1.4237
GBP/CAD – 1.5706
GBP/AUD – 1.6375
GBP/ZAR – 14.8723
GBP/JPY – 150.1751
GBP/HKD – 11.7276
GBP/NZD – 1.9187
GBP/SEK – 9.9816

Mid-market rates as of 2013-07-17 04:00 UTC

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

Australia: AUD Westpac Leading Index (MoM) (MAY)
Europe: CHF ZEW Survey (Expectations) (JUL)
United Kingdom: GBP Bank of England Minutes, GBP Claimant Count Rate (JUN), GBP Jobless Claims Change (JUN), GBP ILO Unemployment Rate (3M) (MAY), GBP Employment Change (3M/3M) (MAY)
New Zealand: No Data
United States of America: USD Fed’s Bernanke’s Prepared Remarks for Congressional Testimony Released, USD Housing Starts (MoM) (JUN), USD Building Permits (MoM) (JUN), USD Fed’s Bernanke Delivers Semi-Annual Policy Report to House, USD U.S. Federal Reserve Releases Beige Book
China: CNY Actual FDI (YoY) (JUN)
Canada: CAD Bank of Canada Rate Decision (JUL 17)
Japan: No data

GBP near term weakness ahead of BoE policy meet

According to analysts the recent weakness observed in the GBP was due to the prospect of the Bank of England adopting forward guidance in setting monetary policy in future when it publishes its next Inflation Report on August 7. In particular, the contents of the report are considered to be useful with respect to informing the decisions taken at the next Monetary Policy Committee on August 1.

EUR/USD rallies on disappointing US data

EUR/USD pair traded higher on Wednesday to reach new daily heights at the beginning of the American session, following the release of worse-than-expected US housing data and the release of Fed Bernanke’s speech transcript. EUR/USD jumped to a fresh weekly high of 1.3175.

Bernanke leaves doors open on QE policy

Bernanke has said on Wednesday that the Fed could start tapering as soon as September but to increase the bond buying path in the next year. In his speech, Bernanke used key words to leaves all doors widely open as he said the 7% unemployment is the magic number and “If good data continued committee saw tapering in September.” The Fed “may taper in 2013, halt it around mid-2014.”

USD rallies against JPY post Bernanke comments.

The USD/JPY witnessed a rally on Wednesday closing at near 100.00 levels after Ben Bernanke conveyed a more hawkish stance than previously hinted by him in an official statement. According to Bernanke, the Fed targets are in line with the plan at the time when they had launched the QE. Indicators have been mixed and awaiting the next economic event.

Australian Business Confidence dips in June

Business conditions in Australia were reported on Wednesday at -1 in Q2 as compared to 2 in Q1.
According to NAB business conditions in Australia tend to struggle in the June quarter when business confidence dips driven by a pessimistic mining sector. Australian equities are also expected to dip as a result. In the meantime the lower interest rates and lower price of AUD do not seem to reflect positively on the economic conditions.

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