Currency update - 20 March 2012
Mar 19th 2012 | 9:15 pm
#1
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Currency update - 20 March 2012
Investors like George's Budget
- But they haven't seen it yet
- Euro higher on successful EFSF bond auction
Good morning. Slotted into tomorrow's Budget, between mansion taxes and help for hard-working families, will be a scheme to let taxpayers know what the government has done with their tribute. Everyone will receive "a personal annual statement revealing how each pound taken from them by the Revenue is spent". One can imagine something along the lines of: "Dear Mr Gull, Thank you for your £9,844.99 contribution to the Exchequer last year. We spent £9,820 of it on new cushions for the Members Bar and £24.99 on a nice little bouquet for Mrs Cameron when she arrived home from her holiday in Tuscany. Yours etc., George."
The European Financial Stability Facility has no equivalent plan for transparency, probably because everyone assumes that every cent it collects ends up in Athens. That knowledge appears not to be a discouragement to investors though. On Monday the EFSF raised €1.5bn through the sale of 20-year bonds with an effective yield of 3.956%. That is 1.2 percentage points more than Germany would have had to pay but Germany has three triple-A credit ratings and the EFSF only two.
Investors were suitably impressed that the EFSF had got its issue away cleanly, with bids for more than three times the stock on offer. By way of respect they bought the euro, making it the day's best performer with gains of one cent against the US dollar and one and a half against sterling.
Otherwise the pound had a fairly good day, gaining ground against everything except the Swiss franc and, for no obvious reason, the South African rand. Given that there were no UK ecostats to help (other than the spoof Rightmove house price index), it looks as though the leaks about tomorrow's Budget are pressing the right buttons for investors.
There were some statistics on Monday's agenda but they were not exciting ones: Euroland logged a larger-than-expected current account surplus of €4.5bn (seasonally adjusted) in January; eurozone construction output fell by -1.4% in the year to January; Canadian wholesale sales were down by -1.0% on the month; The US National Association of Home Builders' index was steady at 28. In his speech in the States, New York Federal Reserve President William Dudley took a neutral line on the US economy. He said "it is far too soon to conclude that we are out of the woods" and insisted there had been no decision yet on whether to roll out another round of quantitative easing.
Today's data releases began with a slowdown in German inflation from 3.4% to 3.2%, exactly as forecast. Next up is Swiss industrial production and then UK figures reveal inflation (expected to be down from 3.6% to 3.4%) and the CBI's manufacturing orders survey (probably down from -3% to -5%). US housing starts and building permits complete the list. As London closes, Fed Chairman Ben Bernanke takes to the podium at George Washington University to deliver the first of four lectures in a course entitled "Reflections on the Federal Reserve and Its Place in Today's Economy".
Any or all of those could have an effect on exchange rates but most probably won't. The impact of the UK numbers will be tempered by the Chancellor's imminent Budget.
- But they haven't seen it yet
- Euro higher on successful EFSF bond auction
Good morning. Slotted into tomorrow's Budget, between mansion taxes and help for hard-working families, will be a scheme to let taxpayers know what the government has done with their tribute. Everyone will receive "a personal annual statement revealing how each pound taken from them by the Revenue is spent". One can imagine something along the lines of: "Dear Mr Gull, Thank you for your £9,844.99 contribution to the Exchequer last year. We spent £9,820 of it on new cushions for the Members Bar and £24.99 on a nice little bouquet for Mrs Cameron when she arrived home from her holiday in Tuscany. Yours etc., George."
The European Financial Stability Facility has no equivalent plan for transparency, probably because everyone assumes that every cent it collects ends up in Athens. That knowledge appears not to be a discouragement to investors though. On Monday the EFSF raised €1.5bn through the sale of 20-year bonds with an effective yield of 3.956%. That is 1.2 percentage points more than Germany would have had to pay but Germany has three triple-A credit ratings and the EFSF only two.
Investors were suitably impressed that the EFSF had got its issue away cleanly, with bids for more than three times the stock on offer. By way of respect they bought the euro, making it the day's best performer with gains of one cent against the US dollar and one and a half against sterling.
Otherwise the pound had a fairly good day, gaining ground against everything except the Swiss franc and, for no obvious reason, the South African rand. Given that there were no UK ecostats to help (other than the spoof Rightmove house price index), it looks as though the leaks about tomorrow's Budget are pressing the right buttons for investors.
There were some statistics on Monday's agenda but they were not exciting ones: Euroland logged a larger-than-expected current account surplus of €4.5bn (seasonally adjusted) in January; eurozone construction output fell by -1.4% in the year to January; Canadian wholesale sales were down by -1.0% on the month; The US National Association of Home Builders' index was steady at 28. In his speech in the States, New York Federal Reserve President William Dudley took a neutral line on the US economy. He said "it is far too soon to conclude that we are out of the woods" and insisted there had been no decision yet on whether to roll out another round of quantitative easing.
Today's data releases began with a slowdown in German inflation from 3.4% to 3.2%, exactly as forecast. Next up is Swiss industrial production and then UK figures reveal inflation (expected to be down from 3.6% to 3.4%) and the CBI's manufacturing orders survey (probably down from -3% to -5%). US housing starts and building permits complete the list. As London closes, Fed Chairman Ben Bernanke takes to the podium at George Washington University to deliver the first of four lectures in a course entitled "Reflections on the Federal Reserve and Its Place in Today's Economy".
Any or all of those could have an effect on exchange rates but most probably won't. The impact of the UK numbers will be tempered by the Chancellor's imminent Budget.
Mar 20th 2012 | 7:26 am
#2
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Joined: Mar 2012
Posts: 1
Re: Currency update - 20 March 2012
Hi friends,
I agree everything with you but i have some other opinion. I know that the currency are updated at the time. In the my opinion, some changes are there that the currency are updated for some specific time. Suppose any person have given the own money into the foreign investor, then he feels realise that i have some sufficient time to take a suitable advice. If our decision is true then i have some profit and if our decision is wrong then i eject the money into the foreign bank .
Thanking you.
I agree everything with you but i have some other opinion. I know that the currency are updated at the time. In the my opinion, some changes are there that the currency are updated for some specific time. Suppose any person have given the own money into the foreign investor, then he feels realise that i have some sufficient time to take a suitable advice. If our decision is true then i have some profit and if our decision is wrong then i eject the money into the foreign bank .
Thanking you.
