AV 15th August 2015 by Asian Business Publications Ltd

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Asian Voice | 15th August 2015

Weekly Currencies

Paresh Davdra is the Dealing Director of RationalFX, Currency Specialists.

Services sector slows down The UK is set to be the fastest growing economy in the g7 for the second year running. Growth is expected to reach 2.5% this year according to the national institute of economic and social research. It also expects unemployment to fall further, but not below 5%. UK house prices are back in growth, by 0.4% in July, following a 0.2% dip in June according to nationwide house price index. Growth in Britain’s services sector has slowed more than expected, as hiring eased to its slowest pace since March 2014. This suggests the economic recovery weakened at the start of the second half of the year. The Market services PMI dipped to 57.4 in July from 58.5 in June, still indicating expansion among services businesses. Last week we did have British industrial output figures which unexpectedly eased in June as the production of oil and gas and mining fell due to weak demand from crisis-stricken Europe and a sharp strengthening of the pound. The total trade deficit in the second quarter fell to 4.812 billion pounds from 7.496 billion pounds the smallest since the second quarter of 2011. Goods export volumes surged 6.6 percent on the quarter driven by exports to non-European Union countries particularly semi-

Foreign Exchange

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manufactured goods and fuels that was the biggest quarterly jump since early 2006. So far, last week the Greek share market has dropped by 16% on the first week of trading after a 5 week shut-down. The main share index is down more than 50% from this time last year. The stock exchange as we all know was closed for five weeks to prevent people from taking funds out of banks even though the stock exchange market is now open, Greek investors are not allowed to use the money they have in the bank to invest into stock exchange. The ADP Employment estimate was disappointing last week, coming in at 185k. The consensus was for a rise to 215k. This was the smallest increase since April and is the fourth reading below 200k this year in comparison to last year it was below 200k only once. Firings are at historically low levels as employers hold on to more workers in response to increased demand following a slump in early 2015. More hiring would help convince Federal Reserve policy makers that the economy can withstand an increase in the benchmark interest rate this year. As such, economists are forecasting the US to hike interest rates ahead of the BoE. Details of a plan that would make up to 86bn euros (£60.9bn)

available to Greece are being negotiated with the International Monetary Fund (IMF), the European Commission, the European Stability Mechanism and the ECB, in talks that began on 20 July. The parties must either reach an agreement or settle on a bridge loan for cash-strapped Greece before 20 August, when a £2.4bn repayment is due to the ECB. Data released by the US census bureau last Tuesday showed that factory orders rose 1.8% as expected up from the -1.1% drop seen in May. Orders for durable goods, products meant to last at least three years, advanced 3.4% in June. Order In July the service sector in America indicated a slight rebound in service sector activity growth, following the five-month low recorded in June. The latest survey also highlighted a strong and accelerated rise in new work, alongside a further robust upturn in payroll numbers. At 55.7 in July, the index picked up from 54.8 in June and remained above the neutral 50.0 threshold for the twentyfirst consecutive month. For non-durable goods edged up 0.4%.The US again posted another strong jobs figure, with jobless claims hovering near the lowest levels in four decades, a sign the strong labour market will bolster growth. Firings are at histori-

cally low levels as employers hold on to more workers in response to increased demand following a slump in early 2015. More hiring would help convince Federal Reserve policy makers that the economy can withstand an increase in the benchmark interest rate this year. As such, economists are forecasting the US to hike interest rates ahead of the BoE. Employers added jobs at a steady pace and wages rose slightly in July, but millions of Americans stayed on the side-lines in the latest sign of some slack in the labour market. Non-farm payrolls rose a seasonally adjusted 215,000 in July, the Labour Department said Friday. Revisions showed employers added 14,000 more jobs in May and June than previously estimated. The unemployment rate, which is obtained from a separate survey of U.S. households, held steady at 5.3% in July. Average hourly earnings of private-sector workers rose 5 cents, or 0.2%, last month to $24.99. From a year earlier, wages were up 2.1%, in line with the 2.0% pace during the sixyear expansion meanwhile, the share of Americans participating in the labour force was unchanged at 62.6% in July. That matches the lowest reading since 1977 suggesting there is still considerable spare capacity in the US labour market.

As of Tuesday 11th August 2015 @ 1pm

GBP - INR = 100.02 USD - INR = 64.19 EUR - INR = 70.86 GBP - USD = 1.56 GBP - EUR = 1.41

EUR - USD = 1.10 GBP - AED = 5.72

GBP - CAD = 2.04

GBP - NZD = 2.38

GBP - AUD = 2.13

GBP - ZAR = 19.80

GBP - HUF = 440.27

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