Central banks to meet on the eve of non farm payrolls
04/Oct/2012 • Currency Updates•
Sterling struggled yesterday following worse than expected UK Services PMI only a day after weak construction data. Although there was still some growth, it was lower than forecasted and the pound fell to a three week low versus the dollar and a two week low against euro. The bank of England is poised to vote to complete its latest round of stimulus amid intensifying dissent on inflation risk. Further quantitative easing is not expected to come into play until November, where analysts are expected to inject a further 50bn into the economy.
Dollar rose yesterday as investors compounded the generally held view that the currency is the true safe haven. Good data such as services and private employment rose more than forecast, giving the dollar a strong outlook befor the all important non farm payrolls figure to be released tomorrow. Unemployment claims and FOMC minutes will be released today. The data helped to boost the dollar to a two-week high against the yen and lifted it against sterling and the Australian dollar.
Being a bank holiday in Germany yesterday, news was quiet in the Eurozone. The ECB will release a statement today and make an interest rate decision, which is not expected to change. Yesterday retail sales figures were release and were positive, causing the euro to strengthen slightly.
Iranian riot police sealed off parts of down town Tehran and fired tear gas rounds after street protests triggered by the country’s tumbling currency. The unrest in the capital of one of OPECs largest producers has knock on effects for the rest of the world. The Rial lost half its value against the USD and reports are saying people are taking drastic austerity measures.