B
BenjaminFX
New Member
Monday 4th April 2011
EUR
With the week geared towards interest rate decision, investors are keenly watching for any early indications as to the wishes of the European Central.
This Thursday the ECB will announce its plans to possibly raise the cost of borrowing in the Euro zone.
However, given the low employment numbers and inflation climbing the fastest it has done in 2 years many analysts’ feel a hike could be a fundamental policy mistake.
Jean Claude Trichet, President of the ECB, has plainly communicated their intent to raise by 25 base points in April. If this hike is made then it is widely rumours that further adjustments could follow in quick succession
Whilst a 25bp increase may already be price into the current market value of the Euro, comments from the ECB to pre-commit to further increases at the accompanying press conference could see fresh support for the 17 nation currency.
USD
Despite the better than expected Non Farming Payroll the Chairman of the Federal Reserve, Ben Bernanke, has reiterated the Fed’s commitment to quantitative easing.
Speaking in Atlanta today Mr Bernanke is expected to provide a progress report on how the US economy is recovering from the worst economic crisis since the great depression in 1929.
Last weeks publications showed a gain of 216k new jobs created for the month of March, and the Manufacturing PMI also reaching levels above analysts’ predictions it is difficult to deny the improvement shown by the world’s largest economy.
This positive data did stir up some members of the Fed who fervently suggest a review of the QE2 program, with one in particular, James Bullard, speaking publically about halving the next round of Treasury bond purchase to $100 billion.
Normal one to shy away from directly speaking about interest rates, should Mr Bernanke’s speech contain a more hawkish tone, this could be the beginning of a US Dollar turnaround.
GBP
This week the Bank of England will see a big data day for Sterling with three main reports due out on Wednesday and Thursday.
The first is the UK’s NESR Gross Domestic Product (Estimate) for the month of March. This is an unofficial estimate of the UK GDP which comes out 1 month before the publication of the official release.
The second of these will be the UK Quantitative Easing program, with the BoE expected to continue with a further purchase of £200 billion worth of bonds.
In terms of market significance the most important will be the BoE’s interest rate decision. Most reports indicated that the Monetary Policy Committee will keep to the current level of 0.50 percent.
There has been plenty of speculation of a hike following poor end of year GDP figures and spiralling inflation, however most believe that a raise in rates would have very little or no impact on the short term inflation picture.
Foreign Exchange Rates Table
These are indicative rates, not buy rates
Currency Pairs Current Mid-Rates at 9.00am
GBP - EUR 1.1344
EUR - GPB 0.8815
GBP - USD 1.6138
EUR - USD 1.4226
GBP - AUD 1.5532
GBP - CAD 1.5531
GBP - NZD 2.0978
GBP - CHF 1.4896
GBP - HKD 12.5506
GBP - NOK 8.8734
GBP - SEK 10.2019
GBP - ZAR 10.8381
GBP - THB 48.85
GBP - AED 5.9305
GBP - MAD 12.8299
GBP - ILS 5.5956
GBP - TRY 2.4780
GBP - JPY 135.64
Benjamin Cole
EUR
With the week geared towards interest rate decision, investors are keenly watching for any early indications as to the wishes of the European Central.
This Thursday the ECB will announce its plans to possibly raise the cost of borrowing in the Euro zone.
However, given the low employment numbers and inflation climbing the fastest it has done in 2 years many analysts’ feel a hike could be a fundamental policy mistake.
Jean Claude Trichet, President of the ECB, has plainly communicated their intent to raise by 25 base points in April. If this hike is made then it is widely rumours that further adjustments could follow in quick succession
Whilst a 25bp increase may already be price into the current market value of the Euro, comments from the ECB to pre-commit to further increases at the accompanying press conference could see fresh support for the 17 nation currency.
USD
Despite the better than expected Non Farming Payroll the Chairman of the Federal Reserve, Ben Bernanke, has reiterated the Fed’s commitment to quantitative easing.
Speaking in Atlanta today Mr Bernanke is expected to provide a progress report on how the US economy is recovering from the worst economic crisis since the great depression in 1929.
Last weeks publications showed a gain of 216k new jobs created for the month of March, and the Manufacturing PMI also reaching levels above analysts’ predictions it is difficult to deny the improvement shown by the world’s largest economy.
This positive data did stir up some members of the Fed who fervently suggest a review of the QE2 program, with one in particular, James Bullard, speaking publically about halving the next round of Treasury bond purchase to $100 billion.
Normal one to shy away from directly speaking about interest rates, should Mr Bernanke’s speech contain a more hawkish tone, this could be the beginning of a US Dollar turnaround.
GBP
This week the Bank of England will see a big data day for Sterling with three main reports due out on Wednesday and Thursday.
The first is the UK’s NESR Gross Domestic Product (Estimate) for the month of March. This is an unofficial estimate of the UK GDP which comes out 1 month before the publication of the official release.
The second of these will be the UK Quantitative Easing program, with the BoE expected to continue with a further purchase of £200 billion worth of bonds.
In terms of market significance the most important will be the BoE’s interest rate decision. Most reports indicated that the Monetary Policy Committee will keep to the current level of 0.50 percent.
There has been plenty of speculation of a hike following poor end of year GDP figures and spiralling inflation, however most believe that a raise in rates would have very little or no impact on the short term inflation picture.
Foreign Exchange Rates Table
These are indicative rates, not buy rates
Currency Pairs Current Mid-Rates at 9.00am
GBP - EUR 1.1344
EUR - GPB 0.8815
GBP - USD 1.6138
EUR - USD 1.4226
GBP - AUD 1.5532
GBP - CAD 1.5531
GBP - NZD 2.0978
GBP - CHF 1.4896
GBP - HKD 12.5506
GBP - NOK 8.8734
GBP - SEK 10.2019
GBP - ZAR 10.8381
GBP - THB 48.85
GBP - AED 5.9305
GBP - MAD 12.8299
GBP - ILS 5.5956
GBP - TRY 2.4780
GBP - JPY 135.64
Benjamin Cole
