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The Hawks Are Flying

The Hawks Are Flying

Good Friday morning and welcome to the last day of what has been another volatile week in the world of foreign exchange.

If you sell the Pound then this has been a good week for you. Sterling has been strengthening all week, and continued with this trend yesterday following on from the Bank of England Inflation Report and Mark Carney’s letter to George Osborne. The UK Inflation Report was on the hawkish side. The MPC believe that we will be above targets for inflation in three years time and the current fall in oil prices have been accounted for in this prediction.

Talk of an interest rate hike appears to have been put to bed for a while as this is not expected to happen until 2016 and even in three years time, it is unlikely that the rates will be significantly higher than 1%. Things appear to be much more relaxed than three months ago and Carney explained to The Chancellor that the current period of falling prices was temporary and not linked to deflation.

Talks are ongoing between Greece and the Eurozone and yesterday we appeared to see a bit of positivity. Whilst Bundesbank President Weidmann said debt relief would not help Greece’s predicament and Greek PM Tsipras maintained that “Greece will not blackmail or be blackmailed”, steps do appear to being made so common ground can be found and we should expect the next installment on Monday.

The major figures out today are GDP from the Eurozone and the Michigan Consumer Sentiment Index from the US.

Have a good weekend!

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