CBI on British Economy: “solid, steady and sustainable”
Your quote of the day: “Flowers grow out of dark moments” Corita Kent
June 8th: Highlights
- CBI on British Economy: “solid, steady and sustainable”
- Greece told to strike deal or face dramatic consequences
- USD 13 year highs against Japanese Yen
- NZD/USD still close to 4.5 year trough
Sterling slipped to 1.3660 this morning against the Euro following the release of German Industrial Production data, which posted a 0.9% increase in for the month and 1.4% on the year, comfortably beating forecasts.
Some commentators, looking at the medium term, are calling the pair may down towards the 1.30 mark, citing negative UK inflation and slower growth than the Bank of England had forecast to justify their calls. However, the CBI believes the 0.3% Q1 growth (slowest since 2012) was a blip, saying that the British economy is “solid, steady and sustainable” with companies reportedly more upbeat than official economic data is showing. CBI forecasts Q2 growth at 0.8% and 2.4% this year.
GBP/USD is trading around the 1.5250 mark. The pair was trading last week between highs of 1.5438 and lows of 1.5175, ending the week with fresh USD-strength following strong Non-Farm Payroll data on Friday. Data confirmed 280,000 jobs were added in May, far ahead of a forecasted 220,000.
Greece has been told by the President of the European Parliament to either strike a deal of face dramatic consequences. Creditors are fast running out of patience, with time running out to find common ground.
The Greek Finance Minister, Mr. Varoufakis compared Greece’s plight to post-war Germany. He commented, “As I write these lines, the Greek government is presenting the European Union with a set of proposals for deep reforms, debt management, and an investment plan to kick-start the economy. Greece is indeed ready and willing to enter into a compact with Europe that will eliminate the deformities that caused it to be the first domino to fall in 2010.”
Friday’s Non-farm Payrolls report surprised the market on Friday and drove the USD higher. Confirmation that 280,000 jobs were added in May (exceeding forecasts of 220,000) adds fuel to the fire for an early rate hike in the US. The possibility of an October, or even September, rate hike are once again being discussed and reflected in residual USD-strength this morning.
As a result of the strong US Jobs report, USD remained broadly higher against the other main currencies on Monday. Over 280,000 jobs were added in May, far ahead of a forecasted 220,000. The USD rose to 13-year highs of 125.84 against Japanese on Friday.
Quiet day of data today, but news from the G7 meeting might cause a reaction, and any fresh developments from Greece
The Kiwi Dollar strengthened against the Greenback in today’s early session, but remained in touching distance of Friday’s four and a half year trough. Positive employment data emerging from the US continued to support investor demand for the greenback.
Have a great day!
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