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534 Posts
Discussion Starter · #1 ·
Range of the week: 1.1813 – 1.1927
Variance of the week on £10k=€114

Major news or data for the week so far:
Thursday saw both the Bank of England and ECB interest rate decisions, with the BOE keeping monetary policy on hold for the 14th straight month - interest rates were held at 0.5% and its asset purchasing programme at £375 Billion. The ECB also held rates at 0.5%.

The decision to hold rates and keep asset purchasing unchanged comes against a backdrop of improving data from the UK, last week a survey of purchasing managers by data company Markit and Chartered Institute of Purchasing and supply was the highest since records began in 1998. The survey is a gauge of activity across manufacturing, construction and the service sector, so it shows all sectors of the economy are contributing towards the recovery. To further add weight to the argument that the recovery is perhaps more pronounced than the BOE would like us to believe, the organisation for Economic Cooperation and Development said that it expected growth in the UK to outpace the US, Germany, France and Japan during the second half of the year. The main reason for Sterling’s recent strength is that off of the back of such positive data, the markets are anticipating a rise in interest rates before Mark Carney and the BOE have themselves predicted. The Bank have said they will not look to increase rates until unemployment falls below 7%, which they predict could be sometime in 2016, however with the housing market looking set for another boom, and with inflation well above the 2% target, may now expect rate rises to come as soon as early 2015. The bad news here for the BOE is they have pledged to keep long term interest rates low in order to in turn keep our economy more stable in the longer term and avoid the mistakes of the past. On Monday, the Chancellor George Osborne set out to seemingly make Mark Carneys job harder by talking up the UK economy, claiming a corner had been turned and even calling for more 95% mortgages, something that contributed towards the artificial housing boom that caused the financial crash in the first place.

In the Eurozone the theme has been largely similar to the UK, with the Eurozone also experiencing a raft of positive data to further support a recovery there. After keeping rates on hold, President of the ECB Mario Draghi was quoted as saying “I am very, very cautious about the recovery. I can't share enthusiasm. It is just the beginning. Let's see, these shoots are still very, very green." So it’s a very similar theme to that of the UK, with the central bank trying to stop people getting carried away, and to an extent talking their currency down as much as possible.

Range of the week: 1.5555 – 1.5826
Variance of the week on £10k=$271

Major news or data for the week so far:
As with the Euro the main reason for Sterling’s recent gains against the Dollar can be attributed to strong economic data from the UK, and the prediction that rates will rise sooner in the UK than had been anticipated, A contributory factor would also have been the Non farm payrolls in the US published on Friday, with 169k jobs added against an anticipated 180k, this coupled with the ongoing situation in Syria, could result in a delay to the Feds planned scale-back of its monetary stimulus programme.

Range of the week: 1.6878 – 1.7216
Variance of the week on £10k= $338

Major news or data for the week so far:
GBP/AUD continues to trade around the 1.70 mark. It is clear that the Australian economy has been artificially boosted over recent years by the mining sector, and with this sector now slowing the relative weakness of the wider economy has been highlighted. Australia needs to carry its economy through a transitional period, away from being so reliant on mining, and a contributing factor to this could be the now record low interest rates that continue to strengthen the housing market. Figures released on Monday show that new home loan approvals had increased for the 6 month in a row. In a bid to try and rebalance Australia’s economy The nation's newly elected prime minister, Tony Abbott, said at the weekend that his conservative administration would move quickly to boost the slowing economy by cutting taxes and building new infrastructure..

Range of the week: 1.9461 – 1.9968
Variance of the week: on £10k= $507

Major news or data for the week so far:
No significant data, this pair continues to trade within its recent range as a result

Range of the week: 15.60 – 16.13
Variance of the week: on £10k= R5300

Major news or data for the week so far:
No major data this week.

Range of the week: 1.6207 – 1.6437
Variance of the week: on £10k= $230

Major news or data so far:
Rates were held at 1% last Wednesday, while 59k extra jobs were added in August against an expected 20k, resulting in CAD gaining back some of its recent losses against GBP
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