Archive - August, 2014

EURCHF is currently trading at 1.2063, its lowest level since December 2012 and as we all know the Swiss Franc is currently pegged to the Euro. Following legislation by the Swiss National Bank (SNB) in 2011 this particular currency pair has been trading in a fairly tight range, they have expressed their desire not to allow CHF to strengthen too much against its more influential neighbour thus creating a unique situation of, in effect, placing a price floor of 1.20. In the past 18…

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The Bank of England release the minutes from the MPC August meeting, with a surprise 7 - 2 vote on interests rates, and a 9 - 0 Vote as expected on asset purchases. Ian McCafferty and Martin Weale voted against the proposition of leave interest rates unchanged, preferring to increase Bank Rate by 25 basis points. This is the first time that any of the MPC has dissented from Carney's position of rates being held at 50 bps. GBPUSD Following yesterday's low…

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The UK economy had been showing strong signs of growth and looked as if it was exiting the financial crisis faster than markets had expected. However the timing of the Bank of England’s rate rise has become the focal point of traders. Expectations vary by analyst though the median expectation is the first half of 2015, though there had been some belief the BoE might act before the year end. Sunday Times Interview This weekend the Bank of England Governor did an interview wi…

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Bank of England released their quarterly inflation report this morning, with the prepared headlines of increased expectations of growth and employment figures putting a bid into Sterling. However the move was short lived, as details of a rate hike projection before year end almost diminished. GBP weakened on the back of comments made in the press conference, as Carney attempted to talk the pound down. With unemployment dropping rapidly, the focus for the BoE has now moved to wage growt…

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Data released by Markit/CIPS, showed better than expected UK service sector Purchasing Managers Index (PMI). In July Services PMI the figure was better than expected at 59.1, compared to Junes 57.6, with growth picking up pace. Service sector employment growth continued, which should contribute towards better UK ILO Unemployment figures. GBP In the FX markets sterling rallied on the back of the strong figure, with GBPUSD trading to session highs just shy of 1.69. The likeli…

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It is the 1st August and the first Friday of the month, and today the US Bureau of Labor releases their employment figures, Non-Farm Payrolls at 13:30 (London,UK). In the last few trading sessions, the USD has been bid against the majors, following Federal Reserve’s announcement of further tapering and policy statement that interest rates are not too far off. This has seen US indices trade lower, and Gold weaken by $20, now trading $1282/oz. Recent data: Initial jobless cla…

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The Markit/CIPS Manufacturing Purchasing Managers Index (PMI), growth continued in July, though missed expectations. The survey released at 9:30am (London), was 55.4 for July, down from 57.2 in June. The number was well above the 50 level (contraction/expansion level), however sterling has been weak in FX markets against the USD in the last few days. GBPUSD In the last quarter, the majority of macro releases were beating expectations, with Sterling trading at a 5-year high on int…

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