Sterling on the back foot after Bank of England minutes
You would be forgiven for expecting sterling to continue to make ground against other currencies following better than expected employment data.
The ILO unemployment rate fell to 7.7% (against a forecast of 7.9%) and better than last months 7.8%. However despite this the pound was sold aggressively yesterday.
We put this down largely to Bank of England minutes. Whilst the voting pattern was unchanged at 6-3 (6 voting for no change in rates and 3 to raise rates) the minutes did not offer any clues as to when interest rates may begin to rise.
This morning Retail Sales figures were okay coming in on par 1.1% MoM and YoY even better at 2.8% so we may see the pound begin a fight back?
Major eurozone focus has to be the arrest and subsequent resignation of the Head of the IMF Mr Strauss-Kahn. And we cannot ignore the potential impact this might have on the negotiation of Greece debt by the ECB and IMF.
Maybe Gordon Brown will offer to “save the world” again!
Later on today
US Manufacturing data
EUR inflation data
19.05.2011 James Roberts