Sterling rises against the Greenback in spite of UK interest rate cut expectations.
The Dollar fell across the board yesterday as markets continued to focus on the US twin deficit. Fears of a further widening of the US external deficit due to Dollar strength were underpinned by an IMF report.
It appears the Greenbacks recent rally has ground to a halt, despite a slew of positive data out of the US. Yesterday’s ISM manufacturing report showed factory growth at a seven-month high, the PMI rose to 56.6. Geopolitical concerns are seen as a further factor in the reverse of the buck’s fortunes.
Further Dollar bearish news came in the form of Russia’s decision to increase the share of Euros in its target currency basket and cut the Dollar’s share.
The single currency found support from strong manufacturing data out of the Eurozone. The purchasing managers index, an indicator of the strength in the economy, showed the industrial sector move from contraction to expansion, rising from 49.9 in June to 50.8 in July.
The Bank of England’s decision to cut interest rates on Thursday seemed increasingly likely following weaker than expected manufacturing data for July. Forecasts expected to see an increase in July to the crucial 50 point level, however the figure came in worse than the previous month at 49.2.
The death of Saudi Arabia’s Kind Fahd, although causing a spike in the price of oil above the $61-a-barrel mark, is not being seen as major cause of concern, as Crown Prince Abdullah has been de facto ruler since Fahd was incapacitated by a stroke in 1995.
Elsewhere S&P 500 rose 0.1%, the Dow Jones fell 0.2% and European markets were largely flat on profit taking.
It appears the Greenbacks recent rally has ground to a halt, despite a slew of positive data out of the US. Yesterday’s ISM manufacturing report showed factory growth at a seven-month high, the PMI rose to 56.6. Geopolitical concerns are seen as a further factor in the reverse of the buck’s fortunes.
Further Dollar bearish news came in the form of Russia’s decision to increase the share of Euros in its target currency basket and cut the Dollar’s share.
The single currency found support from strong manufacturing data out of the Eurozone. The purchasing managers index, an indicator of the strength in the economy, showed the industrial sector move from contraction to expansion, rising from 49.9 in June to 50.8 in July.
The Bank of England’s decision to cut interest rates on Thursday seemed increasingly likely following weaker than expected manufacturing data for July. Forecasts expected to see an increase in July to the crucial 50 point level, however the figure came in worse than the previous month at 49.2.
The death of Saudi Arabia’s Kind Fahd, although causing a spike in the price of oil above the $61-a-barrel mark, is not being seen as major cause of concern, as Crown Prince Abdullah has been de facto ruler since Fahd was incapacitated by a stroke in 1995.
Elsewhere S&P 500 rose 0.1%, the Dow Jones fell 0.2% and European markets were largely flat on profit taking.
posted by Drs Search @ 7:39 AM
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