Currencies Direct Plus

17^th May 2013

Fed finally hinting how QE journey ends

The three key developments across the markets this week have been: upgraded UK growth by the Bank of England in its quarterly inflation report, euro zone growth figures showing countries right across Europe continuing to struggle and an article giving first details on how the Fed would begin to unwind QE as the economic recovery continues.

17^th May 2013

Dollar nears 10-month highs on dovish Fed comments

The US dollar moved higher against a basket of currencies on Friday morning.

Daily Market Analysis

16^th May 2013

King signs off with optimism

Mervyn King has signed out with an upbeat final quarterly inflation report with growth forecasts increased and inflation forecasts scaled down. King expects to see unemployment gradually come down which backs up the official data today which showed unemployment levels falling. The big positive is the expectation that growth expectations are looking rosier and at the same time inflation is softening, previously it has been the other way around.

16^th May 2013

Euro slides on weak GDP figures

The eurozone economy contracted for the sixth consecutive quarter, sending the single currency lower.

Daily Podcast

16^th May 2013

Phil McHugh is a Corporate Dealer at Currencies Direct UK, lends us his expertise on a daily basis. Foreign Exchage (FX) Market analysis is a daily market overview and commentary. King signs off with optimism Mervyn King has signed out with an upbeat final quarterly inflation report with growth fo...

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15^th May 2013

The Bank Of England inflation report- expectations are for higher growth and lower inflation- that makes a refreshing change.

US Dollar rallies as Fed may reduce stimulus.

In a positive outlook for the economy, the US Dollar has managed to continue its recent upward trend with investors optimistic that recovery albeit slow is gradually improving for the US. Investors have been soothed by Ben Bernanke’s declaration that the US economy continues to wait and watch and could reduce further stimulus and quantitative easing, should the Federal Reserve deem fit at any time. In the wake of this scenario, the USD could see some continued strength as it seems to get into a more stable sphere. There was considerable strength for the USD/JPY pair as it broke through the 102 level and continues to trade just above the mark this morning. Even though the economic calendar was fairly barren yesterday, markets traded on sentiment of the US moving into slight growth in the near term. With disappointing figures from China’s manufacturing sector starting off the week, retail sales were marginally better than expected for the US. Later in the afternoon, key figures expected are Industrial production and manufacturing data from the US, which could see a stronger dollar as further growth for the economy is expected to be revealed. With the S&P advancing to its eighth record high in the past nine sessions, optimism is running high that data flows will continue to support the notion of improved growth.

From Europe, The German Consumer Price Index remained stagnant, however the main bit of news comprising of German ZEW Survey which measures economic sentiment came out at a reading of 36.4 much lower than the expected reading of 40. The Euro came under some selling pressure on the data release as markets ride on a wave of scepticism that the most stable economy for the bloc, is also slowing down in terms of growth. We expect French, Italian and German GDP figures to be released later this morning which could be critical for the single currency, and could provide further selling pressure should the figure come out much lower than anticipated. Meanwhile this morning the Euro has struggled to keep pace with the Greenback as it opens weaker at 1.29 in spite of industrial output in the Eurozone jumping by 1% for the month of March. The Euro is likely to stay range bound against the USD between 1.29-1.30 and a break below 1.29 could see a larger slide.

Sterling continues trading in a zone of familiarity, taking its cues from the EUR/USD pair. Ever since the surge since the positive GDP data, it has struggled to maintain consistent strength against most of it’s counterparts . Even though UK house prices rose to its highest level in almost three years last month, as the government pledged 3.5 billion pound of loans plus 130 billion pound of guarantees in March for the housing market alone, Sterling has dropped considerably to 1.5215 which it opens at this morning. However, although unlikely for the near term, former policy makers at the Bank of England still insist that interest rates should be hiked. On the other hand, there was good news for the UK’s FTSE 100 as it powered its way to a five and half year high. We also look forward to The Bank of England inflation report later this morning, which could provide interim support for Sterling as well as Jobless claims which is expected to come out better than expected at -3.0k.

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15^th May 2013

Euro and yen down as dollar strength continues

The euro and yen were just two currencies to fall against the US dollar on Tuesday

Euro, dollar, USA, yen

14^th May 2013

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