In terms of data releases and economic indicators: yesterday was massive! Amid the frenzy of historical revisions, fresh fiscal readings and surprising financial reports around the world,
the Poundsterling - which did not have any domestic data to contend with - was impelled up and down the currency market like the puck in a carnival strongman hammer game being struck by myriad of different-strength competitors.
At around midday Sterling will be treated to some market-moving data of its own as the
Bank of England is set to announce its asset purchasing target and benchmark interest rate for August. A vote to maintain the current level of monetary policy, which is expected by the majority of analysts, should give the
Poundsterling a slight boost, however, an increase to the UK Central Bank's quantitative easing scheme could have a significant negative impact on Sterling.
Euro
The Pound to Euro exchange rate plunged -0.75 cents yesterday afternoon to a 4.5-month low as the Eurozone Unemployment Rate decreased for the first time in two years. The jobless total across the currency bloc fell by 24,000, bringing the Unemployment Rate down from 12.2% to 12.1% as both Italy and Germany saw unexpected improvements in their domestic labour markets.
Whilst the mild employment gains reflect the recent stabilisation of Eurozone economic performance, the 17-nation bloc is still a long way away from mounting a lasting recovery. It was reported by traders that a big chunk of the single currency's gains against Sterling yesterday came as a result of a huge GBP/EUR sell order from a sovereign buyer in order to meet month-end commitments, which triggered a cascade of Sterling shorting.
In other Eurozone news: German Retail Sales disappointed at -2.8%, compared to predictions of 0.5%; Eurozone Consumer Price Index held firm at 1.6%, as expected; and the IMF warned that there is an €11 billion black hole in Greece's bailout programme, which threatens to derail the embattled Hellenic nation's revival attempts. (TORfx)
