The Single currency got a shot in the
arm yesterday, but it had nothing to do with anything that happened in
Brussels. Over in the United States, the figures for retail sales for the month
of April came in lower than expected on all metrics (retail sales and retail
sales less autoes). This has placed doubt on economic growth expectations in
the US after a less-than-stellar first quarter, the outcome of which had been
attributed to bad weather and other “transitory” factors by the Federal Reserve
and market commentators.
The expectations for the first in a
series of core interest rate rises, which directly affects the strength of the
dollar, have now been well and truly priced out of the currency until after the
start of 2016, at the earliest.
Bank
of England cautious on growth forecasts
The Bank of England released its
quarterly inflation report yesterday and used the occasion to dampen
expectations of growth in Britain. Coming on the back of a relatively decisive
outcome in the recent General Election there, this statement did nothing to
weaken the pound sterling, especially in light of the disappointing retail
sales from the US.
The BoE is now letting it be known
that it will not be raising interest rates in the next twelve months, if even
then.
No comments:
Post a Comment