FINANCIAL VOICE
www.abplgroup.com - Asian Voice 30th November2013
21
Foreign Exchange
Paresh Davdra is the Dealing Director of RationalFX, Currency Specialists.
Interest Rate Remains Unchanged The Bank of England in the release of its latest minutes unanimously voted to keep the benchmark interest rate at 0.5% and the quantitative easing programme at £375bn. Policy makers did however comment that even if the unemployment rate falls to the 7% threshold, the BoE may still need to keep the benchmark rate at 0.5%, in order to ensure the recovery was sustainable. The pound dropped immediately following the announcement but soon recovered as investors realised that the comments weren’t too dissimilar from previous ones with regards to an interest rate hike. Positive sentiment in Europe was underpinned by solid German GDP figures. The economy grew by 0.3% in the third quarter, bringing growth for the year to 1.1%. Business confidence in Germany also rose in November; the survey also showed business owners are more optimistic about future developments and plans to recruit more staff. This data eased speculation the central bank will cut interest rates fur-
ther. On a more negative note for the EU, Italy’s retail sales fell 0.3% for the month of September and are now down 2.8% over the last 12 months. European car sales were up 4.7% in October largely driven by a 34% increase year on year in Spain due to a €1,000 government subsidy per new cars purchased. Producer price index from Germany has put the euro under pressure with
the euro down by 0.2% against the pound and the US dollar. Figures from US were quite good. The number of initial jobless claims fell from 344k to 323k, which came in well above market expectations. Manufacturing data for the month of November increased from 51.8 to 54.3. Janet Yellen also moved closer to becoming approved as Fed Chairman by gaining 14 votes to 8. The nom-
ination now goes to the Senate this caused some dollar selling during NY trading hours. The rate of inflation fell in line with forecasts to 1% but retail sales beat forecasts rising to 0.4% in October from 0% in September. The main event however was the release of the minutes from the Federal Reserve’s latest monetary policy meeting. The outcome was a bit of a surprise with policy makers announcing that tapering of its US$85bn monthly bond buying programme may occur in the coming months – as long as the economy continues to improve as anticipated. This would mean that tapering could occur earlier that recent forecast of March 2014. In the US there were 3.9 million job openings in September, a slight increase on August and 310,000 more than in September 2012, according to the Jolts employment survey. It is understood that Janet Yellen, incoming head of America's Federal Reserve, reportedly pays close attention to the data, produced by the Bureau of Labor Statistics.
Weekly Currencies
As of Tuesday 26th November 2013 @ 2pm
GBP - INR = 101.07 USD - INR = 62.55 EUR - INR = 84.63 GBP - USD = 1.62 GBP - EUR = 1.19
EUR - USD = 1.35 GBP - AED = 5.93
GBP - CAD = 1.70
GBP - NZD = 1.98
GBP - AUD = 1.77
GBP - ZAR = 16.40
GBP - HUF = 356.54
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