 November 3rd - Bank On England (boe)'s Governor King Speech, Ism Manufacturing, European Comission's Economic Growth Forecasts, RBA Interest Rate. |
 Nov 3 2008, 7:07
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Hello fellow traders,
We are still in a consolidation. The prices are volatil, the intraday trends often change, each trade is highly risky. Some news in our forex calendar today: 09:30 GMT: Purchasing Manager Index Manufacturing. The Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and the NTC Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in UK. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish. 10:45 GMT: European Comission's Economic Growth Forecasts. The Economic Growth Forecasts released by the Europa is closely watched as an early indicator of current conditions and economic growth expectations for the Eurozone. A high reading is considered as positive, or bullish for the EUR, whereas a low reading is considered as negative, or bearish. 15:00 GMT: ISM Manufacturing. The Institute for Supply Management (ISM) Manufacturing Index shows business conditions in the US manufacturing sector It is a significant indicator of the overall economic condition in US. A result above 50 is seen as positive (or bullish) for the USD, whereas a result below 50 is seen as negative (or bearish). 16:00 GMT: BoE's Governor King Speech. The BoE Chairman Mervyn King was born in 1948. He graduated from King’s College, Cambridge, and Harvard. He gives a press conference as to how the BoE observes the current UK economy and the value of the GBP. His comments may determine a short-term positive or negative trend. If he shows a hawkish outlook, that is seen as positive (or bullish) for the GBP, while a dovish is seen as negative (or bearish). Tomorrow: 03:00 GMT: RBA Interest Rate Decision. RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish. See you in 1 hour with the forex analysis |
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Nov 3 2008, 12:09
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QUOTE British and EU monetary policymakers are facing mounting pressure to slash interest rates to historic lows. The Bank of England's monetary policy committee and the European Central Bank's governing council meets this week amid a clamor for rate cuts unprecedented in their brief histories. Surveys suggest economists expect cuts of at least half a point in the Bank of England rate to 4 percent and the ECB rate to 3.25 percent. European regulators have approved two more national guarantee schemes, aimed at helping banks with financing problems resulting from the recent financial turmoil put forward by the French and Dutch governments. The European Commission said on Friday that both schemes were in line with EU state aid rules and the expanded guidelines which it recently set out for providing government assistance to financial institutions in the wake of the financial crisis. The latest decisions mean that eight national rescue aid packages for the banking sector have now been approved by Brussels. http://www.propertywire.com/news/currency-...0811031963.html QUOTE The coming week of event risk may further dampen trader optimism for the British Pound, as the Bank of England is widely expected to cut rates substantially through its Thursday meeting. The median analyst forecast calls for a 50 basis point cut by the UK central bank, but some are calling for as much as an incredible 100 basis points in easing. Certainly the fact that the UK saw sharply negative GDP growth in the third quarter supports the case for monetary policy easing, but it is unclear that the BoE will move rates so sharply. According to over-the-counter Overnight Index Swaps, traders have priced in near-certainty of a 75 basis point move by the BoE. Though it is obviously difficult to predict exactly what will happen following the rate announcement, rate cut and signals that they will continue cutting rates would likely force further declines in the previously high-yielding GBP. An otherwise lackluster economic calendar promises little in the way of market-moving events for the British Pound, and the currency is more likely to trade off of movements in global risky asset classes. A study of interest rates and currency market movements shows that major currencies have moved almost exactly in line with their short-term interest rates through recent trade. That is to say, the highest-yielding currencies have been the biggest losers through ongoing market turmoil. Given that the British Pound was just recently one of the highest-yielding G10 currencies, we would expect it to continue to move in line with broader financial market activity. Any renewed losses in global equity markets would likely produce selling in the British currency. http://www.dailyfx.com/story/currency/gbp_...5500231882.html |
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