The Bank of England decided to hold rates at 0.5% yesterday whilst also keeping ‘quantitative easing’ here in the UK to a level of £200bn.
This was never going to be a shattering shock; in fact this could have been the biggest foregone conclusion in FX markets in a long time. We are still of the belief that the MPC will keep major announcements to months within which we also have a Quarterly Inflation Report (next being February). As I emphasised to those present on the Bank of England conference call with me yesterday, the opening 3-5 months of 2010 will shape the next 18 months of the financial landscape. This meeting will likely be the one where they decide a pause in QE is necessary and then move to an exit strategy setting.
We have to swallow a bigger piece of data than the BOE report in the form of the US Non-Farm payroll figures. Most analysts were forecasting the first positive figure for 2 years until Wednesday’s poor ADP figure which showed an 84k decline against the consensus view of only 63k. We still believe it will be positive and are looking for a 15k increase. The release is at 13.30.
Other than NFP we have UK PPI at 09.30, EU unemployment at 10.00 and US unemployment rate at 13.30.
Have a good weekend.
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Latest Exchange Rates At Time Of Writing
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Indicative Rates
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Sell
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Buy
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GBP/EUR
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1.1144
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1.1170
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GBP/USD
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1.5966
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1.5990
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EUR/USD
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1.4310
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1.4331
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GBP/JPY
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148.77
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149.06
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GBP/AUD
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1.7439
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1.7463
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GBP/NZD
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2.1839
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2.1872
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GBP/CAD
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1.6493
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1.6533
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NZD/USD
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0.7300
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0.7321
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GBP/ZAR
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11.83
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11.88
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USD/ZAR
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7.4025
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7.4382
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GBP/PLN
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4.5631
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4.5921
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EUR/JPY
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133.34
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133.59
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Rates are dependent on amount transacted. Please call 0207 801 9080 for a live rate quote.
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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.
To view any past or present currency blogs please click on the following link www.worldfirst.com/blog.
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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.
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