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Cheaper Money Transfers to Spain & France as Euro Under Pressure
Published: 4 Jul at 10 AM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Euro Crisis, UK,
The theme of better than expected UK economic data out this week continued yesterday with the publication of the UK purchasing managers' index (PMI) on the service sector rose from a figure of 54.9 in May to 56.9 in June.
This represents the biggest rise in economic activity in the sector in more than two years.
Chris Williamson, Markit Chief Economist commented that “Surging growth in the service sector accompanied a resurgent manufacturing sector and modest growth in construction in June for an increasingly broad-based economic upturn.
However, the pound could come under pressure again as at noon today, we get the first announcement of the Monetary Policy Committee of the Bank of England under the new governorship of Mark Carney. Carney is expected to be more aggressive than his predecessor, Sir Mervyn King in pursuing faster economic growth in the UK on the back of a devalued pound.
The euro is under pressure following the latest bout of political turmoil in Portugal.
The European Central Bank is widely expected to keep its main interest rate unchanged at 0.5% today but attention will focus on the ECB’s President Mario Draghi’s speech following the meeting.
The political turmoil in Portugal has seen two top ministers resign over the last two days and two others rumoured to soon follow suit.
The country now risks the political uncertainty of early elections.
Portuguese 10-year bond yields surged yesterday to more than 8.1% while the country's stock market slumped by 6.0%.
More bad news out yesterday for the euro as data showed that the euro zone recession has extended into a record seventh consecutive quarter.
The Markit Euro zone PMI Composite Output Index was revised downwards from the preliminary estimate of 48.9 to 48.7 in June and signalled that overall activity has now fallen for the last 17 months in a row.
The US dollar strengthened yesterday on the back of better than expected private sector employment data ahead of the publication tomorrow of the official non-farm payroll data for the US. This will send a strong signal to the market as to the health or otherwise of the US economic recovery and the ability of the Federal Reserve to start to unwind its Quantitative Easing program at the end of the year as recently signalled by Fed Chairman Ben Bernanke.
This represents the biggest rise in economic activity in the sector in more than two years.
Chris Williamson, Markit Chief Economist commented that “Surging growth in the service sector accompanied a resurgent manufacturing sector and modest growth in construction in June for an increasingly broad-based economic upturn.
However, the pound could come under pressure again as at noon today, we get the first announcement of the Monetary Policy Committee of the Bank of England under the new governorship of Mark Carney. Carney is expected to be more aggressive than his predecessor, Sir Mervyn King in pursuing faster economic growth in the UK on the back of a devalued pound.
The euro is under pressure following the latest bout of political turmoil in Portugal.
The European Central Bank is widely expected to keep its main interest rate unchanged at 0.5% today but attention will focus on the ECB’s President Mario Draghi’s speech following the meeting.
The political turmoil in Portugal has seen two top ministers resign over the last two days and two others rumoured to soon follow suit.
The country now risks the political uncertainty of early elections.
Portuguese 10-year bond yields surged yesterday to more than 8.1% while the country's stock market slumped by 6.0%.
More bad news out yesterday for the euro as data showed that the euro zone recession has extended into a record seventh consecutive quarter.
The Markit Euro zone PMI Composite Output Index was revised downwards from the preliminary estimate of 48.9 to 48.7 in June and signalled that overall activity has now fallen for the last 17 months in a row.
The US dollar strengthened yesterday on the back of better than expected private sector employment data ahead of the publication tomorrow of the official non-farm payroll data for the US. This will send a strong signal to the market as to the health or otherwise of the US economic recovery and the ability of the Federal Reserve to start to unwind its Quantitative Easing program at the end of the year as recently signalled by Fed Chairman Ben Bernanke.
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Source: moneytransfer.co.uk