Sterling higher on rate debate

17 August, 2015

Cable finds itself around 20 pips higher at the European open on the back of comments from another member of the Bank of England’s MPC outlining the risks of leaving an interest rate rise too late. The comments were in a Telegraph newspaper article, which also outlined the risks of moving too early, but the fact that the debate appear to be getting stronger is the factor that is affecting the currency and making it a little more nervous regarding the prospects of higher interest rates. Elsewhere, the latest GDP data in Japan showed the anticipated weakness after the Q1 strength, declining 0.4% on a QoQ annualized basis, after a 1.1% gain in the previous quarter. The yen was pretty much flat-lined on the news, with attention now turning to tomorrow’s trade numbers.

For today and the week ahead, we should in theory see at least a calmer tone, with the Chinese currency having stabilized as the fix is virtually unchanged from that seen on Friday. That said, the tone to emerging market currencies remains weak, down around 5% on a broad basket against the dollar over the past month. As the prospects of a Fed rate increase remain in the balance, this is likely to continue, especially for those still reliant on overseas capital to fund current account deficits and having funded increased amounts of debt in US dollars. There are no major data releases on the calendar for today, with RBA minutes in Australia the focus for the Aussie overnight and UK inflation data in focus tomorrow.


Source link  
UK Unemployment at 42 Year Low

UK unemployment fell to its lowest level since 1975, data on Wednesday revealed. Unemployment fell by 75K, bringing the unemployment...

US Equities at Record Levels

US equities closed at record levels on Wednesday, as improved risk-on sentiment returned to the markets and news that the US economy...

USD Stabilizes

Hurricane Irma has, reportedly, inflicted less damage on the US mainland than was originally predicted, thereby reducing the economic impact of the devastation it was expected to...


Markets on Edge

With the markets risk appetite dampened after North Korea’s most powerful nuclear test to date, USD and Global equities fell whilst Gold, Yen and Sovereign Bonds all rose....

Risk Appetite Returns

North Korea official news agency reported on Monday that leader Kim Jong Un will watch the actions of the United States for a while longer before making a decision to fire missiles at Guam...

US-Korean Tensions Rattle Markets

Markets were cautious on Wednesday, as safe-haven assets pushed higher after tensions grew between the US and North Korea. Markets are concerned...


Global Manufacturing Grows

Recent data releases have shown that global manufacturing saw an increase in July, further confirming global economic momentum has carried into H2...

All Eyes on Central Banks

Markets were, for the most part, little changed on Wednesday as traders waited for today’s Bank of Japan and ECB rate decisions. Earlier today...

Dollar Bears

UK Consumer Price Index (CPI) data was released on Tuesday showing inflation easing for the first time in nearly 10 months, retreating from the near 4-year high touched in May...

  


Share: