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Strauss-Kahn resigns as head of IMF

Sterling weakened across the board yesterday following the release of employment data and the BOE minutes. As expected the BOE minutes confirmed market sentiment and voted 6 to 3 in favour of keeping rates on hold at their record low of 0.5%. Just before the results were published the markets were spooked by rumours that the usually hawkish Martin Weale had voted against a hike but this proved to be unfounded. Weale and Dale who both voted for a hike of 0.25% said their decision was finely balanced and this was seen as bearish for the pound because the voting dynamics make a rate hike less likely. UK unemployment claims were seen to rise in April at the fastest pace since January 2010. The market now believes that if data from the UK continues to be soggy we could see further MPC members voting for unchanged rates.                                                      
DATA : 09.30 Retail Sales 0.9%    

Now  that the two day meeting in Brussels is over one would think that we could  maybe start to move on. Unfor-tunately the German Chancellor has other ideas. She came out attacking Greece over their retirement age and also over their vacation days. She feels ( and looking at it you would have to agree ) that it is unfair that while the retirement age in Germany stands at 67 it currently at 63 in Greece. She was quoted as saying that while it is (obviously ) important to keep debt under control  it is only right that countries like Greece and Spain exert themselves more or less equally.  The euro had a decent day yesterday holding the gains it  made against the Dollar and strengthening against Sterling moving from a high of around 1.1410 to close our session around the 1.1330 level.
Data:  No major data today.    

Following the release of the minutes from the latest Federal Reserve policy meeting it appears that we are not to see any more quantitative easing.  They are drawing to an end their second round-known as QE2-whereby they purchased around $600 billion of Treasury bonds  in  an effort to keep short-term interest rates near zero in an effort to boost the economy. The feeling coming from the Fed officials is that although the economic expan¬sion has been rather sluggish over the last few months it is well entrenched and so further intervention would do little to improve conditions.
DATA : 13.30 Unemployment Claims
             15.00 Existing Home Sales    

Japans economy shrank more than estimated in the first quarter sending the nation to its third recession in a decade. It looks grim for the coming months before seeing a potential rebound in the later half of 2011 as recon-struction following the earthquake kicks in.    



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GBP/USD 1.6180
GBP/EUR 1.1335
EUR/USD 1.4270
GBP/JPY 132.25


GBP/NZD 2.0430
GBP/ZAR 11.1500


GBP/CAD 1.5670
GBP/SGD 2.0035


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