Forex Weekly Round Up 27 July 2015 – 31 July 2015
The Bank of England’s chief economist Andy Haldane has said that there is “no rush” to raise interest rates, as some members of the monetary policy committee appeared to be gearing up to vote for a rise next month.
The only piece of data concerning the pound on Monday was the release of the CBI Industrial Trends Survey, where order books at British Manufacturers shrunk to the lowest level in two years in July. This has been due to the recent strength of the pound proving too costly for importers of UK goods; economic uncertainty in the Eurozone is also dampening expectations.
UK economic growth accelerated in the second quarter of the year, helped by a big jump in oil and gas production as well as business services and finance sector strength. The 0.7% increase in gross domestic product came in line with consensus and marked a 10th straight expansion and followed a 0.4% advance in the previous three months.
US consumer sentiment plumbed its lowest level in 10 months, falling short of expectations for little change in July, as turmoil in Greece and China stirred global financial markets. The index of consumer confidence fell to 90.9 from 99.8 in June, according to the Conference Board. Economists had forecast the index to remain relatively stable at a reading of 100.
New figures out on Thursday showed that US economic growth accelerated in the second quarter at a 2.3% annual rate, with strong consumer spending offsetting weak business spending. The release fuelled expectations that the Federal Reserve will hike interest rates later this year, however the figure was slightly disappointing, as economists had expected a 2.6% rise in GDP.
In Europe, Greek Prime Minister Tsipras has said that he disagrees with the bailout proposals and will fight to overturn it. He also warned that that Greece’s Eurozone membership is still up in the air until the third bailout is agreed. Speculation is now growing that former Greek finance minister Yanis Varoufakis could face prosecution over his plan to develop a parallel payment system.
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