Dollar hits 13 month highs vs sterling and euro
The dollar rose to new highs on Friday as buoyant data on the US manufacturing sector added to expectations of more rate rises to come from the Federal Reserve.
The greenback surged 1.1 per cent to a 13-month high of $1.1958 against the euro, breaking through a stubbornly defended technical barrier at $1.20, after trading flat for most of the week.
There are a couple of themes for this week – the G8 meeting at Gleneagles on Wednesday through Friday and the MPC monthly meeting Tuesday to Wednesday.
The MPC will have a focus this week that we haven’t seen for a long while as a real chance emerges that we will see the first interest rate cut for over 2 years. Last month 2 of the 9 strong committee argued that a pre-emptive cut would obviate the need for more aggressive action in the long run.
A 40% chance of a cut this month has been cited, though consensus still believe that August will be the preferred month allowing the committee to wait for the Quarterly Inflation report. Further, one of these doves Marian Bell has subsequently left and has been replaced by David Walton anticipated being more of a hawk. The decision on interest rates for this month will be confirmed at noon on Thursday.
The European Central bank also meets at the same time to decide on Eurozone interest rates. Pressure continues to mount to cut rates and give nonexistent growth a boost, and the ECB continue to ignore it! – Expect more of the same.
Britain takes up the presidency of the G8 and decides to host it from a luxury golf course – nice touch – maybe someone told them that G stood got Golf?
With Saint Bob’s Live8 concerts still ringing in the ears of many across the world and the anti-poverty rally due to kick off in Edinburgh this meeting must surely be the most hyped G8 meeting ever. (And just in case you were afraid to ask G8 are not a middle of the road male singing group but the nations: UK (obviously in order of importance!), US, Japan, Germany, Italy, France, Canada and Russia. Key topics are due to be not only the issue of African debt, but the global economy and climate change.
The greenback surged 1.1 per cent to a 13-month high of $1.1958 against the euro, breaking through a stubbornly defended technical barrier at $1.20, after trading flat for most of the week.
There are a couple of themes for this week – the G8 meeting at Gleneagles on Wednesday through Friday and the MPC monthly meeting Tuesday to Wednesday.
The MPC will have a focus this week that we haven’t seen for a long while as a real chance emerges that we will see the first interest rate cut for over 2 years. Last month 2 of the 9 strong committee argued that a pre-emptive cut would obviate the need for more aggressive action in the long run.
A 40% chance of a cut this month has been cited, though consensus still believe that August will be the preferred month allowing the committee to wait for the Quarterly Inflation report. Further, one of these doves Marian Bell has subsequently left and has been replaced by David Walton anticipated being more of a hawk. The decision on interest rates for this month will be confirmed at noon on Thursday.
The European Central bank also meets at the same time to decide on Eurozone interest rates. Pressure continues to mount to cut rates and give nonexistent growth a boost, and the ECB continue to ignore it! – Expect more of the same.
Britain takes up the presidency of the G8 and decides to host it from a luxury golf course – nice touch – maybe someone told them that G stood got Golf?
With Saint Bob’s Live8 concerts still ringing in the ears of many across the world and the anti-poverty rally due to kick off in Edinburgh this meeting must surely be the most hyped G8 meeting ever. (And just in case you were afraid to ask G8 are not a middle of the road male singing group but the nations: UK (obviously in order of importance!), US, Japan, Germany, Italy, France, Canada and Russia. Key topics are due to be not only the issue of African debt, but the global economy and climate change.
posted by Drs Search @ 9:48 AM
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