It’s ticking like crazy.
Still, the euro-gbp is trading withing 0,85 and 0,87 – a range of “only” 2 basis points.
But boy! is it moving….
Waiting on the GDP report
It’s been speculations in the market of the British financial strength after yesterdays slaughter of HSBC who are heavy exposed to Greeke debt.
But on today’s agenda is also the latest GDP report from U.K.
According to Bloomberg, the data may show the U.K.’s economic recovery was stronger than previously measured in the first quarter. Gross domestic product rose 0.3 percent, instead of the 0.2 percent initially estimated, according to the median forecast of 28 economists in a Bloomberg News survey.
The Office for National Statistics will release that data at 9:30 a.m. in London – in just a short while.
Bank of England officials voted unanimously on May 10 to keep their bond purchase plan at 200 billion pounds ($289 billion) as risks to economic growth from Europe’s debt crisis outweighed concerns about faster inflation.
Inflation accelerated to 3.7 percent in April, the fastest pace in 17 months and exceeding the government’s upper 3 percent limit. Posen said in a footnote to his speech that this deviation is preferable to deflation.
“No, I am not happy” about the overshoot, Posen said. “If this proves to be other than temporary factors at work, the MPC should take action. But I’d certainly rather have us temporarily overshooting by around 1 percent than facing oncoming deflation.”
During questions, Posen said that he can see “the end of the road” for Britain’s fiscal stimulus and the nation is “aware” of the risks to extending it too long.
Will soon find out.
Slippin’ And Slidin’
Overall, the euro continue to slide Tuesday morning, but is picking up at the moment as the On-balance Volume indicator shows an increasing number of trades being made.
It’s probably (mostly) the central banks trying to support the currency.
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- Posen Warns of More U.K. Pain (online.wsj.com)
- MPC’s Adam Posen warns Britain at risk of Japan-style deflation (telegraph.co.uk)