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Pound Money Transfer News - Sterling Close to 19 Month High vs Euro
Published: 2 Jul at 9 AM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Currency Exchange, Swiss Franc Exchange Rate, Euro Crisis, UK, Economy, Spain, France,
The Pound traded close to the 19 month high in the foreign exchange market yesterday which was last reached on 15 June after fresh data showed that the UK manufacturing sector activity is at its second highest level in 40 months and manufacturing sector job creation is at a 39 month high.
Commenting on today's manufacturing PMI numbers, BNP Paribas told its clients "Overall, it’s hard not to conclude the UK good-news story in continuing. Manufacturing is growing strongly, and work flows suggest this has legs. This supports our view that UK GDP accelerated in Q2. As this news flow is absorbed further, rate hike expectations for the first hike in Q4 this year should harden."
Meanwhile the Nationwide reported that the average price of a property in London has increased by more than 25% over the past year, the fastest rate of growth since the summer of 1987. London property prices rose by 25.8% between the second quarter of 2013 and the same period this year pushing the average to £400,404, the first time it has topped £400,000. This represents a full 30% higher than the peak reached in 2007.
The pound duly rose to within a whisker of the 19 month high last established on 15 June and a 6 year high against the US dollar.
The corresponding data for the USA showed that its manufacturing sector slipped slightly in June from the reading of 55.4 in May to a reading of 55.3 in June.
Of interest, June’s data would suggest an annualized rate of growth for the US economy of 4% this year.
As a result, some analysts are now predicting that the Federal Reserve may raise US interest rates sooner and further than currently expected.
Economists Paul Dale and Paul Ashworth are now forecasting that the Federal Reserve will raise interest rates as soon as March 2015 instead of the widely expected mid-2015 date. Dale and Ashworth also predict that the Federal Reserve may now increase US interest rates to 3% by the end of 2015.
The Euro suffered another poor day in the currency markets after data showed that German unemployment grew for the second month in a row, on this occasion by 9,000 during June in the latest data release from Germany’s Federal Statistics Office.
The unemployment rate remained unchanged at 6.7%.
In addition, euro zone manufacturing data showed that its ‘recovery’ declined in June to the slowest rate in seven months as the downturn in France deepens.
The readings for Spain and Ireland improved in June but these two countries proved to be the exception as the rest of the euro zone members registered a decline and both France and Greece showed an outright contraction in their respective manufacturing sectors.
Markit Chief Economist Chris Williamson commented that "With manufacturing growing at the slowest rate for seven months in June, the PMI survey will raise concerns that the euro zone recovery is losing momentum”.
This ahead of the next European Central Bank (ECB) policy announcement due out this Thursday. Analysts now predict that given the latest data, the ECB will face fresh calls for more action to try and resuscitate the euro zone economy.
Commenting on today's manufacturing PMI numbers, BNP Paribas told its clients "Overall, it’s hard not to conclude the UK good-news story in continuing. Manufacturing is growing strongly, and work flows suggest this has legs. This supports our view that UK GDP accelerated in Q2. As this news flow is absorbed further, rate hike expectations for the first hike in Q4 this year should harden."
Meanwhile the Nationwide reported that the average price of a property in London has increased by more than 25% over the past year, the fastest rate of growth since the summer of 1987. London property prices rose by 25.8% between the second quarter of 2013 and the same period this year pushing the average to £400,404, the first time it has topped £400,000. This represents a full 30% higher than the peak reached in 2007.
The pound duly rose to within a whisker of the 19 month high last established on 15 June and a 6 year high against the US dollar.
The corresponding data for the USA showed that its manufacturing sector slipped slightly in June from the reading of 55.4 in May to a reading of 55.3 in June.
Of interest, June’s data would suggest an annualized rate of growth for the US economy of 4% this year.
As a result, some analysts are now predicting that the Federal Reserve may raise US interest rates sooner and further than currently expected.
Economists Paul Dale and Paul Ashworth are now forecasting that the Federal Reserve will raise interest rates as soon as March 2015 instead of the widely expected mid-2015 date. Dale and Ashworth also predict that the Federal Reserve may now increase US interest rates to 3% by the end of 2015.
The Euro suffered another poor day in the currency markets after data showed that German unemployment grew for the second month in a row, on this occasion by 9,000 during June in the latest data release from Germany’s Federal Statistics Office.
The unemployment rate remained unchanged at 6.7%.
In addition, euro zone manufacturing data showed that its ‘recovery’ declined in June to the slowest rate in seven months as the downturn in France deepens.
The readings for Spain and Ireland improved in June but these two countries proved to be the exception as the rest of the euro zone members registered a decline and both France and Greece showed an outright contraction in their respective manufacturing sectors.
Markit Chief Economist Chris Williamson commented that "With manufacturing growing at the slowest rate for seven months in June, the PMI survey will raise concerns that the euro zone recovery is losing momentum”.
This ahead of the next European Central Bank (ECB) policy announcement due out this Thursday. Analysts now predict that given the latest data, the ECB will face fresh calls for more action to try and resuscitate the euro zone economy.
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Source: moneytransfer.co.uk