Foreign Exchange - Currency Outlook
The US dollar rate is the beneficiary of flight to safety as declines in Asian stock markets, especially China, arouse fear of a really big equity market correction that might spill over to the rest of the world. Press accounts all say the Chinese market is expecting and waiting for government intervention to support it.
This is the main event but also undermining the euro is producer prices falling 7.8% when 6.6% was forecast, the most since just after the war. Fear of deflation is spotty at best - most foreign exchange analysts and investors are more fearful of inflation or hyper-inflation at some point down the road.
Pound exchange rate is whipsawing, down dramatically on Monday, recovering all of Monday's loss on Tuesday, and back down on Wednesday. Whew. This time the reason for sterling to drop (from 1.6593 just after the US close last evening to 1.6372 at 5 am today) is release of the minutes of the August BoE policy meeting. These indicate a spirited discussion about raising the amount of quantitative easing and a final vote of 6-3 in favor of the £50 billion increase.
According to Reuters, the market thought there had been consensus and more surprising, "The three dissenters, which included BoE Governor Mervyn King, had wanted an extension of 75 billion pounds."
Pounds to US Dollars = 1.6569
Pounds to Euros = 1.1730
Euro to Pounds = 0.8525
Pounds to Australian Dollars = 2.0100
Bye For Now
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!
Buy Travel Money, Buy Holiday Money, Best exchange rates for Travel Money
Contact IMS Foreign Exchange + 44 207 183 2790
No comments:
Post a Comment