#Daily_market_report Pound Holds Two-Day Gain Versus Euro Before BOE Inflation Report - Euro Near Nine-Month Low on Weakening Economy - Market looks to U.S retail sales for further Dollar strength The pound held a two-day gain versus the euro as investors prepared to mine the Bank of England’s quarterly Inflation Report for guidance on when the bank will start to increase interest rates. Sterling rose from a nine-week low reached yesterday against the dollar before central bank Governor Mark Carney presents the report, which will also include the institution’s updated economic projections. While Carney said in a June speech at Mansion House that the BOE may raise its key interest rate from a record earlier than investors expected, he since softened that stance. Last month he said that any increases in interest rates will be determined by the data. The pound strengthened 9.7 percent in the past 12 months, the best performer among 10 developed-nation currencies tracked by the Bloomberg Correlation-Weighted Indexes, as investors brought forward their expectations for the BOE’s first interest-rate increase since 2007. Even so, it’s fallen 0.4 percent in the past month amid signs the U.K. economy is falling short of analysts’ expectations. The pound was little changed at 79.47 pence per euro as of 7:13 a.m. London time after appreciating 0.5 percent in the previous two days. Sterling was at $1.6823 after dropping to $1.6757 yesterday, the least since June 11. The euro traded 0.3 percent from a nine-month low before reports this week that may show growth in the region weakened and inflation slowed, adding to signs the bloc’s economy is struggling to recover. Europe’s shared currency fell yesterday after data showed German investor confidence slumped more than analysts forecast, following figures last week that indicated Italy returned to recession. The euro was little changed at $1.3370 as of 7:18 a.m. in London. It fell to $1.3333 on Aug. 6, a level not seen since Nov. 8. The shared currency fetched 136.76 yen from 136.72. The yen traded at 102.29 per dollar from 102.26 yesterday, after falling 0.2 percent over the previous two trading sessions. The European Union’s statistics office will probably say tomorrow growth in the euro-area economy weakened to 0.1 percent in the second quarter from 0.2 percent in the previous period, according to the median estimate of analysts surveyed by Bloomberg News. A separate report may confirm consumer prices gained 0.4 percent last month on an annual basis, the slowest pace in more than four years. US retail sales are expected to rise 0.2% in the July report (scheduled for release on Aug. 13) vs. the previous month, according to The Capital Spectator’s median econometric forecast. The prediction matches the previously reported 0.2% gain for June. Many economists expect better U.S. retail sales trends in the second half of the year based on favorable economic data and an improved consumer and business outlook. Per Reuters, improvement is seen in nearly all areas from employment to manufacturing, with recovering housing outlook after slumping in late 2013 following a run-up in mortgage rates. Have a good day!
Posted on: Wed, 13 Aug 2014 08:13:55 +0000
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