GBP/EUR At A Multi-Year High

Currencies Direct April 18th 2012 - 2 minute read

Markets were dealt a surprise yesterday as the
Consumer Price Index (CPI) rose in the UK to 3.5% up from 3.4% in February
according to the Office for National Statistics. The ONS blamed higher food
prices specifically soft drinks, bread, cereal, meat, fruit and vegetables
coupled with rises in clothing & footwear. However there was some good news
as utility bills were lower than one year ago following energy companies
reducing tariffs in February last year. All eyes will know be on the Bank of
England as this latest rise could reduce the likelihood of additional
Quantitative Easing in next months MPC meeting but with stuttering growth the
Bank of England may have no choice. 

So far today in the UK we have seen the UK
Jobless Claims figures fall for this first time since last spring. Unemployment
fell by 35,000 to 2.65m according the ONS
leaving the overall rate at 8.3%. Furthermore we saw voting in the Bank of
England for interest rates and QE voting come in at 9-0 and 8-1 to keep rates
on hold and maintain the contribution at £3.25bln. Sterling has rallied as a
result of these figures and currently sits at 1.2212 against the Euro the
highest reading since September 2010. Cable has also risen and is fast
approaching the key psychological level of 1.60 currently trading at 1.5979.

In other financial news Warren Buffet has
announced he has stage one prostate Cancer which will create further hype
around the successor to his Berkshire Hathaway business. As for the rest of
this week we are pretty light on data with inflation data in New Zealand,
Canada and the Germany of any real significance. Finally on Friday watch out
for any press releases from the G20 Finance Ministers Central bankers meeting
in Washington.

 

 

Report by Phil Ryan

Written by
Currencies Direct

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