Currency Market Update 24/09/09
Posted: Thursday, September 24, 2009
by Phil Bennetts
Foreign Exchange Explained
The Pound made gains against the Euro and the Dollar yesterday after the release of the minutes to the Bank of England September meeting following what now appears to be unanimous consensus on the way forward. At previous meetings it was evident there was a push by a few members, namely the governor Mervyn King, to increase the amount of asset purchases from 175 billion Pounds to 200 billion. In a separate report the Confederation of British Industry raised its forecast for third quarter economic growth also signalling that the BoE may in fact move towards capping the plan in the foreseeable future.
The Dollar declined against the Pound while making gains against the Euro yesterday. The FOMC voted unanimously to keep the Fed Funds rate between zero and 0.25% for an extended period of time. There were no hawkish rumblings, as some expected, rather an acknowledgment of some economic recovery accompanied by resource slack and little inflation pressure. Further, the agency and MBS debt purchase program was extended by three months, now ending in March 2010.
The Dollar declined against the Pound while making gains against the Euro yesterday. The FOMC voted unanimously to keep the Fed Funds rate between zero and 0.25% for an extended period of time. There were no hawkish rumblings, as some expected, rather an acknowledgment of some economic recovery accompanied by resource slack and little inflation pressure. Further, the agency and MBS debt purchase program was extended by three months, now ending in March 2010.
The Euro declined against the Dollar and the Pound yesterday, hindered by a smaller than expected preliminary Services PMI, The Services PMI rose to 50.6, the first month of expansion in the indictor in 16 months, while manufacturing remained below the 50 level. Also to note a second report on industrial orders increased for a second straight month in July and orders rose 2.6% from June. The data implies that the recovery in the Euro-zone could be gathering strength though there are still concerns regarding rising unemployment and low investment by companies seeing low capacity-utilization rates.
US 13.30 Initial Jobless Claims (w/e 19th September)
US 15.00 Existing Home Sales (August)
US 15.00 Existing Home Sales (August)
Phil
This Article has been viewed 72 times. (Not updated in real-time.)
No comments yet.We want your comments! If you can read this, you don't have javascript enabled, so you can't use this comment system. Please enable javascript.