Forex Weekly Round Up 5 October 2015 – 9 October 2015

China is studying plans to curb currency speculation even as it seeks to quicken the process of making the yuan trade freely, Yi Gang, a deputy central bank governor said.

Growth in the UK service sector slowed further in September to its lowest rate in nearly two and a half years, a survey has indicated. The latest Markit service sector purchasing managers index (PMI) fell to 53.3 last month from 55.6 in August.

British house prices dropped by 0.9% in September when compared to August. Figures released by Halifax shows the rise in UK house prices in the year to September slowed to 8.6%, from 9% previously. Between July and September prices went up by 2% compared with the previous quarter. As a result the value of the average house or flat in the UK has fallen to £202,859.

On Wednesday we saw the pound climb to a two-week high against the US dollar, boosted by the release of strong UK industrial production data.

The euro also weakened on Wednesday after data showing that German industrial production fell at the fastest rate in a year in August.

On Thursday The Bank of England’s Monetary Policy Committee announced at midday yesterday that the Base Rate would remain on hold at 0.5% by split majority vote. The committee voted 8-1-0, with Ian Mcafferty the single member continuing to vote for a rate hike, the remainders voting for no change and no one voting for a rate cut.

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