Currency Update

Currency Update

From the glow coming off the face of nearly everyone I've seen this morning, I can only assume they all got maximum exposure to the good weather this weekend. I hope you all got chance to do the same & are ready for the week ahead.

It was a fair shock to leave the office on Friday evening to then catch the news that night telling of the rocket in the price of Oil. OPEC maintaining they see no need to increase production despite the hike in price &, as they are not scheduled to meet until September to discuss the same, Oil is expected to maintain a healthy price for the foreseeable future, with some talking the price up further. This morning however the price has come off slightly due to profit taking.

In regards to the UK, the theme seems to be 'Inflation, Inflation, Inflation'. Last week we had the BoE's  no chage stance on interest rates to aid inflationary pressures & this week there is plenty of data to keep it to the forefront of our thoughts. We have already had the Producer Price Inflation figures out & these have highlighted some of the highest increases since like for like records began back in 1986. More evidence that the BoE will not be looking to cut rates anytime soon.

To stick the MPC further between a rock & a hard place the RICS House Price Balance is announced in the early hours of tomorrow morning, which unsurprisingly is expected to give more evidence of the UK housing markets slow down. Released around the same time will be the BRC Retail Sales Monitor figures expected to show a fall in sales on the high street. Adding to these we have the release of the Manufacturing survey & output figures, again more evidence of a slowing economy is expected.

The US Non Farm payroll figures got the market thinking about the state of the US economy &, given the reaction of the markets further to comments from Trichet regarding the ECB's agenda to control inflation, plus the UK date PPI data from earlier, the USD has lost ground over the weekend & this morning against both the Euro & the Pound

Plenty more UK data to be released at the backend of the week to keep us entertained.

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