Carney and Sterling under the spot-light (video)
Currencies Direct November 25th 2014 - < 1 minute read
The pound fell from a two week high against the euro yesterday, following stronger IFO data which is a key gauge of business sentiment in Germany. This provided some relief to the Euro after last week falling to a two-year low against Greenback. This followed the European Central Bank Mario Draghi’s comments of “excessively low inflation” that must be rectified fast, using whatever methods and prompting bets on further stimulus. Draghi warned, if there was no economic improvement in the medium term, that the ECB would expand and step up its programme to pump more money if the current measures fell short of lifting inflation.
In Europe this morning we have seen a revised set of German GDP numbers which confirmed growth of 0.1 per cent in the last quarter and the annual number registered at 1.2 per cent, the lowest since the last quarter of 2013. EURUSD sits at 1.2426 and GBPEUR at 1.2610 flirting with the key psychological level of 1.25.
Later today, an assembly of Bank of England officials including Mark Carney, Jon Cunliffe in addition to Monetary Policy Members Kristin Forbes and Ian McCafferty will appear before Parliament’s Treasury Select Committee. A similar sentiment to the latest QIR is expected, which could be Sterling negative if they reiterate their view on delaying future rate hikes.