Go Back  British Expats > Partner Forums > HiFX - International Currency Transfers
Reload this Page >

Weekly Market Update 26-01-2011

Weekly Market Update 26-01-2011

Old Jan 27th 2011, 11:20 am
BE Enthusiast
Thread Starter
Joined: Dec 2004
Posts: 524
Windsor2 will become famous soon enoughWindsor2 will become famous soon enough
Default Weekly Market Update 26-01-2011

A key week for the UK this week and certainly seen a big reaction from the market.

Two key pieces of data that has been released. Firstly, UK GDP came in at a shocking -0.5pc showing that the UK economy had surprisingly shrunk in the last quarter. This was against expectation of +0.4/0.5pc. The market reacted accordingly to this s news and the pound immediately lost considerable ground against most currencies.

The negative figure was widely attributed to weather conditions in the UK, however the Office for National Statistics estimate that bad weather towards the end of the year wiped 0.5pc off of growth and therefore the ‘adjusted’ figure would have been flat – still not painting a positive outlook for the UK. The fear around a long debated ‘double-dip’ in the UK now appears to have gained some footing.

Bank of England minutes this morning don’t appear to have calmed concerns. It has been shown that two of the nine MPC members voted for a hike to 0.75pc (+0.25) and the remaining seven for no action. However, the minutes do suggest that the MPC as a whole appear to be showing concern that the risk of increasing inflation is now a medium – term issue as opposed to one that will be resolved in the short-term.

Following on from last weeks inflation figure of 3.7pc Mervyn King delivered a speech last night which suggested that inflation in the UK could rise to as much as 5pc and that the Bank of England had not been willing to increase interest rates despite elevated inflation due to external forces such as an increase in VAT, sharp increases in food and fuel costs. This could suggest that the MPC are still unlikely to act against inflation in the near term.

Nothing much to note from Europe this week.

Range of the week: 1.1527-1.1774
Variance of the week on £10k €247

Consumer confidence – an assessment of consumer sentiment regarding business conditions, employment and personal income -rose to the highest level in eight months yesterday. The unexpected jump in confidence follows on from a small drop in unemployment and is largely attributed to the confidence in the labour market expanding in the coming months.

The FED meet this evening on interest rates.

Range of the week: 1.5750 – 1.6017
Variance of the week on £10k $267

Inflation in Australia fell to the lowest level in 12 months at 2.7per cent which slows the expectations of further rate hikes from the RBA.

Range of the week: 1.5798-1.6205
Variance of the week on £10k 407AUD

New Zealand
The Bank of New Zealand meet overnight to decide on interest rates, largely expected to be held at 3pc however, with inflation sharply rising to 2.3pc will there be any surprises?

Range of the week: 2.0502-2.1123
Variance of the week on £10k 621NZD

Inflation released at 2.4pc slightly lower than anticipated however, still shows an increase from the previous reading.

Range of the week: 1.5667-1.5925
Variance of the week on £10k 258CAD
Windsor2 is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.