The Pound made great gains against the Euro, Dollar and Rand in the afternoon’s trading session following the Monetary Policy Committee’s split decision on raising interest rates.
The vote came in at 5-3 just after noon today to keep rates on hold at the record low 0.25%. Kristin Forbes surprisingly found support from two others to raise rates to 0.5%.
Markets were surprised and rightly so since this was the first time since 2011 that there has been 3 dissenters on the committee. Sterling reacted accordingly trading up aggressively against all major currencies, in particular recovering losses against the USD after yesterdays Fed announcement.
This announcement has acted as a smokescreen for the poor retail sales figures which came out in the morning session. Retail sales fell sharply last month pouring more uncertainty on the UK economy as we head into the Brexit negotiations.
Asian Currency Wars A thoughtful article in the South China Post on Saturday evening raised the spectre for what many fear but few choose to put into words: China opting for a significant devaluation of the Yuan to make it more competitive and that in turn triggering devaluations in the other Asian economies. The reason […]
Japanese Yen As soon as a rash of market analysts concluded yesterday that the Yen was a basket case and that the Bank of Japan were wasting their money intervening to prop up the Yen, the Japanese Yen strengthened markedly on the back of US data admittedly rather than positive Japan data, but it certainly […]
UK Pay With unemployment at its highest since last year with the Q1 rate at 4.3%, it would look safe to assume that the Bank of England would be encouraged to cut UK interest rates sooner rather than later; however with wage growth at 6% providing the counter argument to sooner, the first cut may […]