Noticias
01 Feb 2016

Euro Rises, As Sterling Traders Await Thursday

Sterling ended last week trading around $1.43 and mid-point of €1.31, which is mainly due to markets holding off any positions until the Bank of England MPC minutes this Thursday. Elsewhere the EUR/USD starts this morning trading around mid $1.08 which is beginning to strengthen after poor Economic sentiment last week.

Since Mark Carney became governor of the Bank of England his policy of using words to move the markets has generally been rejected and has left him with little support from the market. As a result expect Thursday to cause a hostile environment for the British Pound.

Last week US fourth quarter GDP data was 0.7% which was below expectations of 0.8%. Meanwhile today we have US manufacturing PMI and Stanley Fisher addresses the media. Manufacturing PMI will indicate activity starting off 2016 which could be seen as a guide for the year especially as manufacturing is under pressure in America.

Euro area factories cut prices

The possibility of deflation within the Euro zone continues to haunt the ECB. Manufacturers PMI fell to 52.3 from 53.2 in December. During January, prices charged by manufacturers fell at the fastest rate in a year which is very worrying for the ECB.

UK manufacturing

UK manufacturing shot up to 52.9 for January from 52.1 in December. This represents a three month high for manufacturing in Britain and may support George Osbourne’s attempts to create a balanced economy.

 

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