King Eyes the Weak Pound to Boost UK Exports
Yesterday Mervyn King’s speech outlined the tough times that lie ahead, pressing upon the nation that the UK is likely to continue this period of persistent low growth, also warning that the nation may slip back into recession.
Following the asset buying programme’s termination last week, the governor of the Bank of England asserted that quantitative easing had not lost its utility. Indicating that a further bout of stimulus would be beneficial for the export economy, the sterling dropped against all of its major peers during trading.
Easing, or even the intimation of easing, as we have seen is enough to send investors fleeing. Perhaps both intimations of further stimulus may have been wisely planned as the strength that both currencies have shown has negatively affected exports, and consequently their respective economic recoveries.
For those looking to transfer money in the coming days, taking into consideration Mr. King’s propensity for a weak pound, investors may bet on a sterling fall.
Today’s Key Announcements:
- 06.30am – EUR – French Prelim GDP q/q: 0.2%
- 07.00am – EUR – German Prelim GDP q/q: 0.2%
- 09.00am – EUR – ECB Monthly Bulletin
- 09.30am – GBP – Retail Sales m/m: expected contraction to -0.1%
- 10.00am – EUR – Core CPI: expected to remain at 1.5%
- 10.00am – EUR – Flash GDP q/q: expected at -0.2%
- 13.30pm – USD – CPI m/m: expected flat at 0.1%
- 13.30pm – USD – Unemployment Claims: expected slightly higher at 372k
- 13.30pm – USD – Empire State Manufacturing Index: expected contraction at -7.2
- 18.20pm – USD – Fed Chairman Bernanke Speaks
See previous Daily Market Reports