Foreign Exchange - UK Daily Update - Written by jeremy on Thursday, February 19, 2009 8:10 - 0 Comments
Bank Of England Minutes Point To Imminent QE - World First’s Morning Update - 19th February 2009
Yesterday’s trade session was dominated by the US housing market; poor data and a plan to fight the downturn. January housing starts fell to the lowest level on record with a paltry reading of 466k units against a December figure of 560k; a whopping 17% fall. Industrial production was also terrible although higher than the month before while capacity utilisation fell to 72% highlighting the effect the downturn has had on the manufacturing side of the American economy.
The Bank of England minutes were no great surprise after Mervyn King flipped the cards at last week’s Quarterly Inflation Report. The vote on the rate decision was entirely expected at 8-1 with David Blanchflower, the perennial dove, being the lone dissenter and voting for a cut to 0.5%. The MPC also voted unanimously to write to the Chancellor to ask for permission to prepare the measures necessary for quantative easing. This measure could be in action by next month with consensus views pointing to a 50bps cut in a fortnight’s time.
The euro fell to its lowest level since November 2008 against the dollar as fears over the fate of Eastern European banks continued to send shivers through equity markets. The single currency also weakened against GBP although with the bearish tone of the BOE minutes the trading session was a game of cat and mouse.
The minutes from the US Fed were also very downbeat as they downgraded their growth forecast to 1.3% from 1.8% although they expect unemployment to tack back from the 7% level we have at the moment to around 5%.
The data calendar is fairly light today with the typical Thursday Initial Jobless Claims while US PPI is set to fall as factory gate costs weaken in line with the downturn in commodity markets.
Further analysis is of course always available at our video blog http://uk.youtube.com/user/WorldFirstJC
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Indicative Rates |
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|
|
Sell |
Buy |
|
GBPEUR |
1.1367 |
1.1394 |
|
GBPUSD |
1.4325 |
1.4354 |
|
EURUSD |
1.2575 |
1.2611 |
|
GBPJPY |
134.01 |
134.42 |
|
GBPAUD |
2.2237 |
2.2277 |
|
GBPNZD |
2.7917 |
2.7976 |
|
GBPCAD |
1.7970 |
1.8035 |
|
NZDUSD |
0.5117 |
0.5150 |
|
GBPZAR |
14.42 |
14.48 |
|
USDZAR |
10.04 |
10.09 |
|
GBPPLN |
5.3495 |
5.3860 |
|
EURJPY |
117.80 |
118.10 |
|
Rates are dependent on amount transacted |
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Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our: Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080. Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.
To view any past or present currency blogs please click on the following link www.worldfirst.com/blog
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