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Forex Flash: Pound resilient yesterday despite UK closed for the day - Investec

FXstreet.com (Barcelona) - Investec Treasury analysts note that whilst the UK enjoyed an extra day off yesterday the US was open and the S&P equity index took the opportunity to climb to another all time record high at 1617.5.

They continue to note that despite London markets not being open for business the pound performed resiliently, largely as a result of a very encouraging Services PMI figure on Friday morning which completed a trilogy of better than expected UK surveys last week after construction and manufacturing also surpassed expectations. They write, “Ahead of the Bank of England interest rate decision this Thursday these figures should make the Monetary Policy’s discussion a little easier as it appears they will not announce an expansion of the asset purchase programme. Elsewhere, Australia cut interest rates overnight from 3% to 2.75% which has triggered a sell-off in the Aussie Dollar allowing GBP/AUD to climb above 1.52.”

Forex: EUR/GBP storms to 0.8450 on surprising German factory orders

With the 0.8415 area holding the cross against the downside, the EUR/GBP stormed off to the upside as March German factory orders contradicted the latest gloomy surveys. Investors are cheering with the surprising 2.2%, instead of the -0.5% contraction as expected. February data was revised slightly lower from 2.3% to 2.2%. German factory orders in year-on-year basis dropped further, from -0.2% (revised from 0.0%) to -0.4%, but that came in better than the -2.9% expected.
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Forex: The Aussie has lost a further 40 pips in London

Traders have pushed through the over night lows of where business was done at 1.0178, after the sell-off in Asia when RBA in fact decided to cut by 25 basis points.
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