Yesterday saw one of the quietest trading days on the currency markets that we have seen in recent weeks with both GBP/EUR and GBP/USD trading in a range of less than 1 cent. Much of this could be put down to the lack of data out yesterday.
Sterling has been struggling these last few weeks and hit a five month low against the Euro yesterday on fresh fears that the UK economy could be in for another slump. When we started coming out of the recession the weak pound was seen as a ticket to boost the economy through increased exports but this does not seem to be materialising. Couple this with the inevitable squeeze that the budget cuts will cause and it does not look too great for the UK at least in the short term and another round of QE would hurt the pound more.
Many investors will be sitting on the side lines waiting for the slew of data out today. This morning we have the inflation figures and trade balance data out for the Eurozone but the main event starts this afternoon with a speech from the Fed’s chairman Ben Bernanke and many will be on the lookout for signals of QE2. His speech will set the stage for the rest of the figures out this afternoon and if more quantitative easing looks more likely then it may amplify any effect the comes from rest of the US data out later in the day.
So USD weakness and Sterling weakness could be the drivers going into the weekend and short of some very poor data out for the Eurozone it could be the Euro that takes the lead going into next week.
Posted in Daily Market News on May 30 2014
The greenback continued to fall yesterday on growing expectations that the US will extend the quantitative easing currently in place when the Fed meets again in early November. The new round of weakness means that the Euro has managed to break through the resistance level at 1.40 managing to get...VIEW FULL ARTICLE
Posted in Daily Market News on Oct 14 2010 by admin