The pound sterling persists to wilt as the market dumps the currency in front of year-end. Sterling had been effortlessly the worst-performing G10 foreign currency once again on Wednesday because of downward revision in final 3rd quarter GDP figures.
The Office of National Statistics changed Q3 GDP to +0.7% quarter over quarter from the prior +0.8% reading which had been enough to send the cable to a nearly one hundred pip drop. GBP/USD fell below the 200-day moving average for the first time since September. The Bank of England minutes failed to move the market even with a slight bias toward rising rates. The minutes uncovered a three-way split for the third consecutive month, as estimated.
Seven in the 9 MPC members elected for no alteration of economic policy while Andrew Sentance voted to raise rates and Adam Posen voted to boost bond purchases. The general tone of the minutes encouraged that voters are transferring toward Sentance's side. "Most of those members considered that the accumulation of news over recent months had probably shifted the balance of risks to inflation in the medium term upwards," the minutes said.
The Swiss franc goes on to outperform and so it was the leading G10 performer once again. The fundamentals drivers of the latest move in CHF are not clear and flows might be generating the move. The chance, nonetheless, that there's a deep underlying demand for francs should not be eliminated. We believe that the long-term sovereign issues inside the euro area will justify a bid for the CHF as a safe haven during the year ahead.
The top news from North America on Wednesday was an upward revising to 3rd quarter GDP to an annualized pace of 2.6% from 2.5%. This was viewed as a disappointment, nonetheless, because economists have been expecting a revising to 2.8%.. The suddenly lower reading came because of downward modification in individual consumption from 2.8% to 2.4%. The slowing consumer spending is a harmful signal for holiday spending. Inflationary details from the report proceeds to support the Federal Reserve's case for QE2. Core prices rose at a 0.5% annualized pace, the slowest since record-keeping began in 1959.
The Office of National Statistics changed Q3 GDP to +0.7% quarter over quarter from the prior +0.8% reading which had been enough to send the cable to a nearly one hundred pip drop. GBP/USD fell below the 200-day moving average for the first time since September. The Bank of England minutes failed to move the market even with a slight bias toward rising rates. The minutes uncovered a three-way split for the third consecutive month, as estimated.
Seven in the 9 MPC members elected for no alteration of economic policy while Andrew Sentance voted to raise rates and Adam Posen voted to boost bond purchases. The general tone of the minutes encouraged that voters are transferring toward Sentance's side. "Most of those members considered that the accumulation of news over recent months had probably shifted the balance of risks to inflation in the medium term upwards," the minutes said.
The Swiss franc goes on to outperform and so it was the leading G10 performer once again. The fundamentals drivers of the latest move in CHF are not clear and flows might be generating the move. The chance, nonetheless, that there's a deep underlying demand for francs should not be eliminated. We believe that the long-term sovereign issues inside the euro area will justify a bid for the CHF as a safe haven during the year ahead.
The top news from North America on Wednesday was an upward revising to 3rd quarter GDP to an annualized pace of 2.6% from 2.5%. This was viewed as a disappointment, nonetheless, because economists have been expecting a revising to 2.8%.. The suddenly lower reading came because of downward modification in individual consumption from 2.8% to 2.4%. The slowing consumer spending is a harmful signal for holiday spending. Inflationary details from the report proceeds to support the Federal Reserve's case for QE2. Core prices rose at a 0.5% annualized pace, the slowest since record-keeping began in 1959.
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