by Korman Tam
The greenback continued to rebound against the majors, rising to 109.27 versus the yen and 2.0585 against the sterling. The major currency pairs will take direction in the coming session from US economic reports, which include October durable goods orders and existing home sales. Durable goods orders are expected to be flat in October, versus a 1.7% decline from the previous month. The excluding transports durable goods orders are seen declining by 0.2% compared with a 0.5% increase previously. Meanwhile, existing home sales for October are expected to soften to 5.0 million units, down slightly from 5.04 million units from September.
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Cable Pressured Amid Mixed BoE Comments
Bank of England board member Sentance expressed the difficulty is setting monetary policy as a result of “the extent and likely duration of the slowdown in UK growth against the impact of inflationary pressures coming through from the global economy and their potential impact on inflation expectations”. Further, Sentance said it was important to continue monitoring the impact of financial market and credit developments on growth in major global economies. MPC member Lomax said that the Bank’s projections for lower rates are not promises, but foresee easing in the next two years.
In contrast, BoE Chief Economist Bean sounded a hawkish tone in an interview with a UK newspaper, saying “the backdrop to the Bank’s attempts to keep inflation in line with target is less favorable than it has been”. He said that “if the imported component of inflation is somewhat higher the domestically generated component needs to be somewhat lower to compensate”, suggesting that tighter monetary policy may be required to temper domestic inflation.
The greenback continued to rebound against the majors, rising to 109.27 versus the yen and 2.0585 against the sterling. The major currency pairs will take direction in the coming session from US economic reports, which include October durable goods orders and existing home sales. Durable goods orders are expected to be flat in October, versus a 1.7% decline from the previous month. The excluding transports durable goods orders are seen declining by 0.2% compared with a 0.5% increase previously. Meanwhile, existing home sales for October are expected to soften to 5.0 million units, down slightly from 5.04 million units from September.
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Cable Pressured Amid Mixed BoE Comments
Bank of England board member Sentance expressed the difficulty is setting monetary policy as a result of “the extent and likely duration of the slowdown in UK growth against the impact of inflationary pressures coming through from the global economy and their potential impact on inflation expectations”. Further, Sentance said it was important to continue monitoring the impact of financial market and credit developments on growth in major global economies. MPC member Lomax said that the Bank’s projections for lower rates are not promises, but foresee easing in the next two years.
In contrast, BoE Chief Economist Bean sounded a hawkish tone in an interview with a UK newspaper, saying “the backdrop to the Bank’s attempts to keep inflation in line with target is less favorable than it has been”. He said that “if the imported component of inflation is somewhat higher the domestically generated component needs to be somewhat lower to compensate”, suggesting that tighter monetary policy may be required to temper domestic inflation.
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