4 Sep 2013
Flash: EUR/USD and GBP/USD supported on economic expectations - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the euro and pound are continuing to derive support in the near-term as investors are still readjusting their expectations for growth in euro-zone and UK.
Key Quotes
“The release of the final services PMI surveys for August are expected to reveal that the pace of economic recovery in the eurozone continues to strengthen, although the pace of recovery still remains gradual so far.”
“In contrast, the initial phase of recovery in the UK is proving much more dynamic with the composite PMI surveys likely to record a new record high in August even if the services PMI eases back modestly.”
“The surveys are consistent with quarterly growth of 1.0%+ in Q3. That pace of growth has not been seen Q2 2010 during the initial phase of recovery following the global financial crisis.”
“It proved a near-term peak and that pace of growth is unlikely again to be sustained ahead with more modest quarterly growth of around 0.4% more likely in 2014. As a result consensus real GDP growth forecast are being revised up towards 1.5% in 2013 and 2.2% in 2014.”
“We doubt that a stronger UK economic recovery will prove enough to materially ease pound weakness in the year ahead given structural weakness resulting from still loose BoE policy and the UK’s elevated current account deficit as external financing conditions tighten.”
Key Quotes
“The release of the final services PMI surveys for August are expected to reveal that the pace of economic recovery in the eurozone continues to strengthen, although the pace of recovery still remains gradual so far.”
“In contrast, the initial phase of recovery in the UK is proving much more dynamic with the composite PMI surveys likely to record a new record high in August even if the services PMI eases back modestly.”
“The surveys are consistent with quarterly growth of 1.0%+ in Q3. That pace of growth has not been seen Q2 2010 during the initial phase of recovery following the global financial crisis.”
“It proved a near-term peak and that pace of growth is unlikely again to be sustained ahead with more modest quarterly growth of around 0.4% more likely in 2014. As a result consensus real GDP growth forecast are being revised up towards 1.5% in 2013 and 2.2% in 2014.”
“We doubt that a stronger UK economic recovery will prove enough to materially ease pound weakness in the year ahead given structural weakness resulting from still loose BoE policy and the UK’s elevated current account deficit as external financing conditions tighten.”