Central Banks feel the pinch of inflation
The start to a short week in London saw currency markets yesterday take direction from the doom & gloom released in both the Euro-zone and here in the UK with the greenback holding strong.
Yesterday morning saw the German Ifo Business climate at its lowest in three years reporting a figure of 94.8, with Current Conditions coming in at 103.2 and Business Expectations at 87.
These figures supported some economists' views that the slowdown in economic growth going forward is likely to be more protracted and that cuts in rates are now likely given speculation that a peak in inflationary pressures is now on the horizon.
Tuesday afternoon's Consumer Confidence figure came out slightly up in the States this month at 56.9, from 51.9 in July. A lower than expected drop in house prices also gave support to the dollar.
The FOMC minutes from the August 5th meeting released last night suggest rates are likely to remain on hold for the meantime. Some Fed officials remain concerned about inflation not easing in 2009 and so the next move could be a rate hike. This of course contrasts strongly with views that the next BoE move will be to cut here in the UK, and so support would seem to remain with the Dollar in the longer term.
The British Bankers Association (BBA) reported overnight that mortgage approvals for last month totalled 22,448, only just above last month's record low of 22,369. Whilst the data was slightly improved on the month, the BBA warned it did not expect to see a recovery any time soon.
We have very little focus on the Economic data front for today with just the US releasing anything of note in the form of Durable Goods Orders for July. Market expectations are for a 0.1% rise in the headline figure and ex-transportation orders to fall 0.4%.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Yesterday morning saw the German Ifo Business climate at its lowest in three years reporting a figure of 94.8, with Current Conditions coming in at 103.2 and Business Expectations at 87.
These figures supported some economists' views that the slowdown in economic growth going forward is likely to be more protracted and that cuts in rates are now likely given speculation that a peak in inflationary pressures is now on the horizon.
Tuesday afternoon's Consumer Confidence figure came out slightly up in the States this month at 56.9, from 51.9 in July. A lower than expected drop in house prices also gave support to the dollar.
The FOMC minutes from the August 5th meeting released last night suggest rates are likely to remain on hold for the meantime. Some Fed officials remain concerned about inflation not easing in 2009 and so the next move could be a rate hike. This of course contrasts strongly with views that the next BoE move will be to cut here in the UK, and so support would seem to remain with the Dollar in the longer term.
The British Bankers Association (BBA) reported overnight that mortgage approvals for last month totalled 22,448, only just above last month's record low of 22,369. Whilst the data was slightly improved on the month, the BBA warned it did not expect to see a recovery any time soon.
We have very little focus on the Economic data front for today with just the US releasing anything of note in the form of Durable Goods Orders for July. Market expectations are for a 0.1% rise in the headline figure and ex-transportation orders to fall 0.4%.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: credit crunch, FED, interest rates, Weak Sterling
posted by Wise Money @ 10:43 AM
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