Posts Tagged ‘inflation’
Foreign Exchange - UK Daily Update - Tuesday, April 9, 2013 7:26 - 0 Comments
World First Morning Update 9th April: Chinese inflation allows a positive European open
One of the biggest fears over the past few months for us economic folk has been the limited room for stimulus that the inflation picture in China has afforded. Prices hit a 10 month high last week on increases in food and fuel, and combined with last year’s weakest annual growth for 13 years, fears had increased that the authorities would have to settle for low growth and/or high inflation in the coming months. Last night inflation slipped back from 3.2% to 2.7%. This continues our belief that the Chinese economy has managed to engineer a soft landing from the issues it faced last year, but has not been able to leave the runway again.
This has been treated as good news by the market and alongside the wall of money coming from Japan sentiment is good as Europe opens up this morning. The most difficult move to explain is the increase in demand for peripheral European debt that has seen yields on Spanish, Italian and particularly French debt shrink ever lower. This smells like a desperate search for yield from investors, something which could easily turn sour when Eurozone issues rear their ugly heads again.
Sterling has come in for a bit of a hit overnight on very little news. We would put this down to recent moves in the JPY and the likelihood that traders are starting to price in similar monetary policy manoeuvres from the Bank of England once Mark Carney takes up the role of Governor in July.
There may also be some anticipation of poor manufacturing and industrial production numbers from the UK in February, following the poor PMI number for the sector in that month. The market is expecting slight growth on the month but large year-on-year falls. The figures are due at 09.30.
The big mover in FX markets however continues to be the Japanese yen following the Bank of Japan’s decision to fight its deflationary issues by throwing the kitchen sink and the rest of the kitchen at the problem. Moves towards 100 in USDJPY seem almost certain now but we are wary of calling it much higher from there on the basis that the yen should be used as a haven when Eurozone issues return and/or US data starts to disappoint – both things we are expecting in Q2 of this year.
Have a great day.
View the latest exchange rates and live graphs here.
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Indicative Rates |
Sell |
Buy |
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GBPEUR |
1.1721 |
1.1741 |
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GBPUSD |
1.5248 |
1.5271 |
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EURUSD |
1.3000 |
1.3022 |
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GBPJPY |
150.61 |
150.85 |
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GBPAUD |
1.4640 |
1.4659 |
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GBPNZD |
1.7979 |
1.8004 |
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GBPCAD |
1.5510 |
1.5534 |
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NZDUSD |
0.8474 |
0.8487 |
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GBPZAR |
13.70 |
13.75 |
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USDZAR |
8.9843 |
9.0069 |
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GBPPLN |
4.8313 |
4.8538 |
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EURJPY |
128.42 |
128.62 |
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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. |
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