Sterling

The economic indicators for the UK economy are showing that a recovery is beginning to gain momentum and is hopefully sustainable. Since the “credit crunch” the economy has been into a recession (not the double, or triple that had been previously thought) but it was deeper than initially thought. The British economy is dominated by the service sector, and is a global leader in many areas of finance, such as foreign exchange transactions. The PMI data released on Monday comb…

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This morning the Ex-Bank of Canada Governor begins his role as the new Bank of England Governor, taking over from Sir Mervyn King. Carney is the first foreign national to hold the senior post on Threadneedle Street, and many are hoping he will be able to work miracles. The UK economy is just beginning to show the green shoots of a recovery following a deeper recession than previously thought according to the ONS. The BoE has attempted to reignited growth with ultra-loose monetary polic…

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UK RICS house price gauge is at a 3-Year high, fuelled by sustained low borrowing costs and the government incentives to help boost the property market. However concerns are growing that the belief of historically low interest rates becoming the “new normal,” could lead to a blood bath as mortgage payments increase when rates do eventually rise. SNB's Danthine: Exchange Rate Floor Necessary to Advance SNB Mandate - WSJ S&P upgraded the US rating outlook to sta…

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Japan's stocks entering a correction, dropping more than 10% from their peak -Bloomberg Each $1 in credit firepower added the equivalent of 17 cents in GDP, down from 29 cents last year and 83 cents in 2007 (China) -Bloomberg The Government must continue with its deficit reduction plan if it wants to turn the UK’s economy around and establish the recovery, the influential Organisation for Economic Co-operation and Development (OECD) said yesterday Euro area data,…

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There is a growing concern that the UK government’s flagship scheme to help first time buyers access the housing market will fuel a property bubble. On Monday according to data released by Rightmove, theaverage house price in London is now above £500,000 for the first time. Low borrowing rates, demand outstripping supply and buy-to-let rental yields have all fuelled the surge. Analysts are highlighting that the Chancellors scheme to help many individuals access the property marke…

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The Ernst & Young Item Club said persistently high inflation had knocked almost 3 percentage points off the economy over the past three years and was set to remain above the Bank of England's 2 per cent target "for the foreseeable future" - The Independent The Conservative party over the weekend has come under attack following a national paper printing comments said to have been made by a senior Tory official stating grassroots party members were “swivel-eyed lo…

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China's sustainable and stable economic growth offers great opportunities to the world, Chinese Premier Li Keqiang said on Sunday Japan’s new stimulus policies have led to a sharp revival in demand for traders in Japanese bonds, equities and currencies, with “Abenomics” fuelling trading volumes in those markets - Financial Times The Spanish economy contracted at a slower pace in the first quarter of 2013, preliminary data released by the statistical office I…

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Cable traded to a 10 week high on Sterling strength, as investors believe that there the Bank of England will not do any further quantitative easing. This was compounded with the better than expected GDP figure, and avoided the anticipated triple-dip recession. The macro data from the UK was in contrast to the United States growth figures released on Friday, which were below expectations. Reuters sights the 1.5574 level as the next level of technical resistance for GBPUSD as it is the 100 da…

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On Thursday the eagerly anticipated preliminary reading for UK GDP Q1 from the ONS showed that the UK had avoided a dreaded triple-dip recession, for now. Chancellor, George Osborne has been under considerable pressure to change course away from the current path of austerity. Following consecutive readings of poor economic data, criticism from the IMF and a downgrade by Fitch, Osborne has some briefing space. The ONS expect the UK economy to grow by 0.3%, which might be the milestone remembe…

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The Office for National Statistics (ONS) releases its preliminary UK GDP estimate for the first Quarter of 2013 at 9:30am (BST). Economists are expecting a marginally positive print of 0.1%, however a contraction would show that the UK economy has gone back into a recession for a third time since the credit crunch in 2008. A “triple-dip” recession could lead rating agency S&P to downgrade the UK’s credit rating from its top notch of AAA, on the 5th April S&P said&ld…

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The Chancellor of the Exchequer George Osborne is to announce the UK’s budget to Parliament at 12:30 GMT. This is a key date for the markets as rating agencies have identified its importance for the credit rating and outlook for the UK. Sterling has been under considerable pressure since the start of the year with credit rating agency Moody’s downgrading the UK for the first time since 1978 from the top level of AAA to Aa1. Osborne had continually cited the importance of th…

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The Bank of England’s Monetary Policy Committee (MPC) minutes were released this morning and showed that its members voted 6 to 3 against increasing quantitative easing (QE). The current level of the Asset Purchase Facility (AFP) setup in January 2009, is £375bn, with Governor King and two other voting for an increase of £25bn to a total of £400bn of QE. Following the release of the minutes, Sterling rallied as no other members had voted for an increase of QE from its…

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Bank of England Minutes of the Monetary Policy Committee Meeting 6 and 7 March 2013 (Link) http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2013/mpc1303.pdf The above link is to an external website and Abshire-Smith are unable to accept responsibility for its contents.…

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During the early part of the US session yesterday Sterling was bid in FX space, reversing recent declines. Mervyn King current Governor of the Bank of England had a pre-recorded, exclusive interview with ITV News (British News Channel) however the price action indicates that this could have been leaked. King said that the recovery is finally “in sight,” only a short time after he changed his stance and voted for further quantitative easing. In the interview he said that if you re…

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