Today was a relatively quiet day for economic data and the main focus was Mark Carney’s speech on the Financial Stability Report before the Treasury Select Committee in London.
Carney stated that the Fed’s December interest rate hike last month has added to global market turbulence but stopped short to say that it was the root cause. He then reaffirmed his outlook, set out in his speech last week, that market conditions were not ripe for an interest rate hike in UK and that we’re not likely to see one this year.
Contrary to Osbourne’s Cardiff speech at the start of January where he warned UK will face one of the toughest challenges since 2008. Carney also played down the prospects of any major banking failure and comparisons to the 2007-08 crash. Carney reiterated the threat of a ‘Brexit’ from the Eurozone and the instability it may cause – particularly with reference to Britain’s current account deficit.
All in all Carney’s words have been received warmly by GBP sellers and we’ve seen GBP rally slightly across the board. US consumer Confidence came out better than expected at 98.1 from forecast 96.6.
Overnight, we have Australian CPI expected at 0.3% following by US Rate Decision which is expected to remain at 0.5%. Equally, tomorrow evening will see the Rate statement from New Zealand which is also forecast to come in line with expectation at 2.5%.
Latest FX news by Joe De Berniere
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