Foreign Exchange – UK Daily Update
Foreign Exchange - UK Daily Update - Wednesday, June 19, 2013 7:33 - 0 Comments
World First Morning Update 19th June: We need to talk about Fed-in
We have eventually reached ‘Fed Day’ and are only a few hours away from knowing the Federal Open Market Committee’s latest thoughts on whether the US economy is in good enough shape to start tapering away its asset purchase plan.
Since the previous meeting the data has been a motley mix of good and bad with only the very slightest improvement in the overall trend. While jobs have come higher and consumer spending has remained good, we are looking at a puzzling inflation figure in the US.
The Fed’s stock measure of inflation (Personal Consumption Expenditure) only rose 0.7% through the year to April, less than half the bank’s target. While we think that the risk of deflation in the US is low, we also believe that the Fed will continue asset purchases at the current rate through until the end of the year.
At the May meeting a “few” members of the FOMC thought that this month’s meeting should signal the start of a tapering program and the key will be whether any members have taken this belief forward and actually voted to begin.
The decision comes at 7pm with Bernanke taking questions 30mins later. The dollar has strengthened in the run-up to the meeting.
The euro also had a strong day yesterday, following Mario Draghi emphasising that the ECB was still considering the use of “non-conventional measures” – asset purchases, negative interest rates, SME support – if the Eurozone was felt to need it. While this is not a change in policy, it comes a couple of weeks after Draghi’s post-ECB decision press conference that suggested that the negative rate plan had been binned.
German ZEW also surprised to the high side and pushed the euro onwards, developing the trend that the German economy is performing significantly better than the rest of the Eurozone. Expectations were a lot higher while the current situation component remained flat; an easy bubble to be burst and something that will remain vulnerable through the summer.
UK inflation as depicted by CPI rose to 2.7% yesterday which shows the recent dip was possibly just a blip. Pressures in oil markets and the possible devaluation of the pound by the new Carney Governorship of the Bank of England may signal that this is just the beginning unfortunately. Sterling dipped on the session following the stronger dollar pre-FOMC and the influx of euro buyers.
Apart from the Fed we have US mortgage applications at 12.15 UK time. The market will be hoping that last week’s 5% increase was not a blip and strong growth can be continued for the 2nd week in a row.
Have a great day.
View the latest exchange rates and live graphs here.
|
Indicative Rates |
Sell |
Buy |
|
GBPEUR |
1.1671 |
1.1692 |
|
GBPUSD |
1.5638 |
1.5660 |
|
EURUSD |
1.3386 |
1.3407 |
|
GBPJPY |
148.71 |
148.94 |
|
GBPAUD |
1.6440 |
1.6467 |
|
GBPNZD |
1.9505 |
1.9534 |
|
GBPCAD |
1.5965 |
1.5989 |
|
NZDUSD |
0.8009 |
0.8023 |
|
GBPZAR |
15.62 |
15.67 |
|
USDZAR |
9.9899 |
10.0327 |
|
GBPPLN |
4.9684 |
4.9913 |
|
EURJPY |
127.13 |
127.33 |
|
Please note these rates are “interbank” rates i.e. they indicate where the market is currently trading and are not indicative of the rates offered by World First. Rates are dependent on amount transacted. It is important to remember that foreign exchange rates fluctuate all the time. The rate you will receive will depend on the amount and currency you require. Please call 0808 115 5821 or 020 3393 7836 for a live quote or login in to your World First Online account here. |
||
- World First Morning Update 18th June: Market gets the jitters before Bernanke
- World First Morning Update 17th June: Tick tock on the tapering clock
- World First Morning Update 14th June: Reassuring US data soothes market concerns
- World First Morning Update 13th June: The Night is Dark and Full of Terrors
- World First Morning Update 12th June: Central bank concerns crush EM, bounce likely
- World First Morning Update 11th June: Emerging markets hurt by USD and BOJ inaction
- World First Morning Update 10th June: Jobs report pauses dollar’s demise
- World First Morning Update 7th June: Dollar crucified by uncertainty over central bank actions
- World First Morning Update 6th June: ECB to shy away from negative rates, USD remains offered
- World First Morning Update 5th June: Japan’s 3rd arrow misses target ahead of services, ADP
- World First Morning Update 4th June: ISM miss lowers near-term tapering chances, cracks USD
- World First Morning Update 3rd June: Important week for the USD ahead of NFPs
- World First Morning Update 31st May: Dollar weakness comes as growth, claims disappoint
- World First Morning Update 30th May: Japanese issues swarm through Asian markets
- World First Morning Update 29th May: Confidence in the US, confidence in the USD
- World First Morning Update 28th May: Dollar remains strong after long, quiet weekend
- World First Morning Update 24th May: Volatility continues as rally struggles on
- World First Morning Update 23rd May: Bernanke comments prolong USD strength
- World First Morning Update 21st May: Countdown to UK and US minutes
- World First Morning Update 21st May: Markets wait for tomorrow’s minutes, UK CPI today
- World First Morning Update 20th May: Strong US dollar continues; Yen weakening may be completed
- World First Morning Update 17th May: Weaker US data, talk of end of QE3
- World First Morning Update 16th May: Markets take QIR as non-event
- World First Morning Update 15th May: USD powers on: Mervyn King’s last stand
- World First Morning Update 14th May: Heavy data calendar for Europe
- World First Morning Update 13th May: All about dollar strength
- World First Morning Update 10th May: USD strength across the board – blamed on JPY
- World First Morning Update 9th May: UK Industrial Production and BoE the focus
- World First Morning Update 8th May: Better German and Chinese data sets tone
- World First Morning Update 7th May: AUD rate cut continues the trend
- World First Morning Update 3rd May: Rate cuts abound
- World First Morning Update 2nd May: Fed hints at more easing, ECB to take the plunge
- World First Morning Update 1st May: USD at 2 month low ahead of FOMC
- World First Morning Update 30th April: Is Japan’s experiment starting to pay off already?
- World First Morning Update 29th April: GBPUSD through 1.55 on poor US GDP and Fed expectations
- World First Morning Update 25th April: UK GDP a nice surprise, US expecting similar
- World First Morning Update 25th April: UK expected to miss triple-dip by slimmest of margins
- World First Morning Update 24th April: ECB rate cut starting to be priced in for May meeting
- World First Morning Update 23rd April: European deficits fall along with peripheral yields
- World First Morning Update 22nd April: Yen weakens on G20 approval of BOJ plans
- World First Morning Update 19th April: Lack of data into the weekend, eyes on G20
- World First Morning Update 18th April: ECB members communicate looser policy is possible
- World First Morning Update 17th April: Fed speakers continue easing chatter as BOE minutes due
- World First Morning Update 16th April: Commodity currencies battered on China, yield issues
- World First Morning Update 15th April: China data disappoints after poor US retail sales on Friday
- World First Morning Update 12th April: Eurogroup meet in Dublin to discuss Cypriot bailout
- Fed signal mixed thoughts on further easing
- World First Morning Update 10th April: China trade surprise pushes AUD higher ahead of Fed minutes
- World First Morning Update 9th April: Chinese inflation allows a positive European open
