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.

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.

As the US’ own monetary easing programme, Operation Twist,
winds up, the Federal Open Market Committee seemed to similarly suggest the
possibility for further easing.

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

 

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