Tuesday, August 17, 2010
, Posted by Usman Ali Minhas at 3:18 AM
International Trading
It was definitely an August trading day yesterday. Liquidity was sparse and you got the feeling that those at their desk didn’t particularly give a monkey’s as to what was going on.
News from Japan hurt the market in the early stages as it was reported that GDP had fallen on a QoQ basis to 0.4% vs a previous figure of 2.3%. The export driven economy is being hampered by the strong yen and retailers are finding it difficult to stimulate consumer demand and overcome the Japanese natural propensity to save rather than spend.
The dollar reversed some of its recent gains yesterday with the Jap yen and the Swiss franc benefiting from flows into ’safe’ assets. Data from the US was also poor yesterday with Empire Manufacturing showing the rate of production slowing whilst the NAHB survey revealed falling confidence in the US jobs market. We are still confident however that we will see falls for GBPUSD in coming weeks.
On a sterling front we have UK CPI and RPI due at 09.30 with our, and the market’s, belief that we will continue to see inflation above a CPI target of 3%. This would prompt Mervyn King to write a letter to the Chancellor to explain why; something that will cause no surprises given how recent the banks latest inflation report was.
Inflation has been very sticky in the UK and is set to stay high in 2011, which recovery permitting, should prompt interest rate rises next year.
Data today also includes German ZEW at 10.00, US PPI at 13.30 and US housing starts at 15.00
Latest Exchange Rates At Time Of Writing
| 1.2153 | 1.2183 |
| 1.5651 | 1.5677 |
| 1.2861 | 1.2883 |
| 133.43 | 133.71 |
| 1.7336 | 1.7371 |
| 2.2001 | 2.2030 |
| 1.6273 | 1.6270 |
| 0.7098 | 0.7120 |
| 11.33 | 11.38 |
| 7.2384 | 7.2700 |
| 4.8233 | 4.8489 |
| 109.61 | 109.87 |
Rates are dependent on amount transacted.
