We asked the team at HiFX for their thoughts on the current market situation and here’s their Market Commentary as of 09.04.2014
“The last week has seen the release of some important PMI and manufacturing figures for the pound. PMI figures are generally a leading indicator of economic health in a variety of sectors and the manufacturing, construction and services PMIs have come in under expectation and have kept the pound around the 1.2060 level. However, yesterday saw the release of the UK manufacturing output growth figure which came in at 1% beating market expectations of 0.3%. This is the highest level in more than two and a half years with companies reporting good trading conditions both abroad and at home which pushed up the value of the pound against the Euro by a full 0.5%. Britain was also predicted to be the best performing of the worlds major economies by the IMF yesterday with growth expected at 2.9%. This, along with the interest rate decision due tomorrow, analysts could be looking for signs of an early interest rate hike.
Thursday saw the ECB leave interest rates unchanged in the Eurozone at 0.25%. This was in line with market expectations and represents the 4th consecutive month we have seen interest rates at this level since the change in November. ECB president Mario Draghi has been under pressure to cut interest rates in order to combat the recent risk of deflation, however despite the fact that inflation is in the Draghi ‘Danger Zone’ of below 1%, this hasn’t been done. Instead, some analysts are suggesting the ECB may adopt a new round of cheap loans or large scale purchases of financial assets to provide an overall boost to the Eurozone economy. This was backed in the press conference following the rate decision which showed all members of the Governing Council for the ECB showing willingness for the implementation of a policy similar to QE or quantitative easing.”
For all your foreign exchange requirement you can contact the HiFX team at their Costa Blanca office via telephone +34 965 978 952 / +34 711 762 922 or by email costablanca@hifx.co.uk