Dampened optimism over the British economy
Quote of the day: “Don’t let the fear of losing be greater than the excitement of winning.”
October 9th: Highlights
- Sterling trims gains against US Dollar
- Dollar holds steady against Euro
- BOE keeps interest rates unchanged
- GBP/CAD drops on strong Canadian housing data
Sterling Comment
The Bank of England decided by a vote of 8-1 to keep rates unchanged. Ian McCafferty was the sole member voting for a 0.25% hike. We also heard that inflation is still well under the target rate of 2%, despite key improvements in UK GDP figures indicate it could bounce back to expected levels by the end of next year.
Yesterday, GBP/EUR sailed to a daily high of 1.3629 in the morning session, following poor economic data emerging from Germany weighed heavily on the single currency. However, following the BOE interest rate decision, GBP/EUR dropped to lows of 1.3543. The pair recovered throughout the day, and is now trading around 1.3573.
Global Comment
The US. Dollar was almost unchanged against the single currency this morning, and gained ground on the JPY, following the ECB indication that policy will remain accomodative for as long as needed. EUR/USD traded steady at 1.1279. We saw strong data releases yesterday stateside with US Jobless claims sinking to a whooping 42 year low, claims fell by 13,000 to a seasonally adjusted 263,000, far lower than expectations of 274,000. EUR/USD is now trading at around the 1.1325 mark.
The Aussie Dollar traded higher in this mornings session against the US Dollar. AUD/USD traded 0.7262, up 0.05%, while GBP/AUD is trading in the region of 2.0988.
Strong Canadian housing statistics were released yesterday, showing the strength of the housing market. This gave CAD a boost ahead of very important unemployment data which will be released at 1.30pm today. Strong housing figure coupled with a weakening sterling after the Bank of England announcement saw GBP/CAD drop below the key level of 2.00 to a daily low before closing at 1.9955. The pair now trades at 1.988.
Have a great day!
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