Sterling fell more than 1 percent against the Euro yesterday, after reaching a seven and a half year high against the single currency on Friday. The UK Government reported that net borrowing had fallen to its lowest figure since 2008. This failed to boost the Pound as currency moves were exaggerated by low liquidity as the summer holiday season kicks in.
Today will see the Bank of England release the interest rate and asset purchase facility voting pattern after last week’s decision. Comments last week from Mark Carney, head of BoE, pointed to rates possibly being increased as soon as February next year, economists’ will look to see if the continued unanimous 9-0 will stay constant in keeping the rate at its 0.5% historic low. On the other hand, could previous hawkish members Ian Mccafferty and Martin Weale change their dovish vote and feel that the UK economy is now ready for a rate rise? Anything other than a 9-0 vote could see Sterling strength as markets expectations could raise hopes that a rate rise could come sooner rather than later for the UK.
Later this afternoon, the US releases its existing home sales, with the figure forecast to increase to 5.40million, pointing to a positive economy as the housing industry continues to exceed expectations. This evening the Greek parliament will be voting on passing the second set of reforms, which are to speed up the justice system and propping up failed banks. As the first set of reforms were passed a week ago and focused largely on budget reforms and tax hikes, the second set of reforms once agreed by Greece will be the step in the right direction in helping secure the €86 billion Euro payment for the EU, and keep them in the single currency.