Wednesday January 12, 2005 - 11:40:26 GMT
Share This Story
INVESTICA Ltd - www.investica.co.uk
Trade data fails to benefit Sterling
The better than expected trade figures should have offered some near-term relief for the UK currency and it is also unlikely that the Bank of England will decide to cut interest rates at the meeting starting today. The longer-term Sterling fundamental concerns will however persist which will limit Sterling rallies and the initial reaction has been disappointing. Overall there is still the medium-term risk of a move to 1.8550 against the dollar.
Sterling was unable to recapture levels beyond 1.88 against the US currency and weakened to 1.8710 against the dollar in early Europe on Wednesday. Sterling held close to 0.6990 against the Euro.
The November trade deficit narrowed by more than expected to GBP4.6bn from GBP5.0bn in October. The EU trade deficit narrowed to its lowest level since May 2003. The underlying trend is still for a deterioration, but the data will at least offer some near-term relief.
The Bank of England monetary meeting will start today with an announcement on Thursday and the most likely outcome is that the central bank will decide to keep interest rates unchanged. The markets are probably over-optimistic over the chances of a near-term interest rate cut and this should also lessen the near-term threat of Sterling losses. The longer-term fundamental concerns will persist.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."