23.02.2016 19:22 American focus: The pound continued to fall against major currencies
The pound depreciated significantly against the dollar, approaching to the psychological mark of $ 1.4000. The cause of this trend was the increased demand for the US currency and the neutral tone of the statements of the Bank of England Governor Mark Carney and the representatives of the Central Bank of Huila and Shafiq. Carney said that the Bank started the development of an emergency scenario in case Brekzita and said he had enough room to maneuver, he is ready to lower rates or extend the program of QE. It is also noted that the Committee had not formulated an opinion on the most likely outcome of the referendum and its implications for the exchange rate of the national currency. "It seems that in recent years the dynamics of the pound affect the upcoming vote From the perspective of monetary policy the most important is the stability of the national currency and the dynamics of its conditional factors." - Carney said.
Meanwhile, representatives of the Bank of England said they did not consider it necessary to increase interest rates in response to the decline in the pound on the eve of the referendum. The weakening of the pound should lead to an increase in import prices and to help ensure that the Central Bank inflation target of 2%.
In addition, the deputy. the head of the Bank of England Shafiq said that wage growth should accelerate. "It is advisable to abstain from voting in favor of a rate hike as long as wage growth is not sufficiently convincing and relevant inflation target after eliminating uncertainties, it is expected that the economy will support more rapid rate increase than the estimated market yield curve." - Said Shafiq.
Earlier, the Bank of England this month made it clear that the first since 2007, the rate hike will happen quite soon, the cause of which is the deterioration of prospects for the global economy and fluctuations in the financial markets caused by the slowdown in emerging economies.
The Swiss franc fell more than 100 points against the US dollar, reaching a minimum on 22 February. The demand for the franc rose after the head of the SNB's Jordan said that unconventional policy measures can not be used indefinitely, if the Central Bank plans to achieve the desired. "A set of monetary instruments has expanded, but did not become infinite. The effect of monetary policy may weaken over time, and the use of unconventional measures potentially entail costs. It is necessary to constantly evaluate the ratio of costs and effects of monetary instruments. If the tool is no longer have the desired effect on the background of changed circumstances, it is necessary to adjust policy ", - said Jordan. Also the head of the SNB reiterated that the Swiss franc is still significantly overvalued against the euro in real terms.
In the course of trading was also influenced by mixed US data. As it became known, housing prices in major metropolitan areas have continued to rise in December, although the increase was slightly less than expected. Composite House Price Index for the 20 mega-cities of the S & P / Case-Shiller increased by 5.7 percent compared to the previous year, compared with analysts' estimates, is expected to increase by 5.8 percent.
Another report showed that the consumer confidence indicator from the Conference Board declined in February. The index is currently 92.2 (1985 = 100) as compared to 97.8 in January. the current situation index fell to 112.1 from 116.6, while the expectations index fell from 85.3 to 78.9 in February.
It was also reported that home sales in the secondary market increased by 0.4 percent and reached a seasonally adjusted annual rate of 5.47 million in January from a revised down figure of 5.45 million in December. Sales are now 11.0 per cent higher than a year ago - the largest increase compared to the previous year since July of 2013.
The euro partially recovered against the dollar, returning to the levels of the opening, which was caused by the publication of a controversial US statistics. Previously, pressure on the euro have provided data on the business climate in Germany. the business climate index of the Ifo fell to 105.7 in February from 107.3 in January. According to the forecasts it was expected to decline to 106.7. Meanwhile, the current conditions index rose to 112.9, while economists had forecast it to fall to 112 from 112.5. The expectations index fell to 98.8 from the initial estimate of 102.4 in January. The expected result was 101.6. In turn, the gross domestic product grew by 0.3 percent compared to the third quarter, when it grew at the same pace. Sequential growth rates correspond to the preliminary assessment. Taking into account the calendar of amendments GDP increased by 1.3 percent year on year, followed by expansion of 1.7 percent in the previous quarter. The unadjusted GDP grew by 2.1 per cent per annum in the fourth quarter after increasing 1.7 percent in the previous three months. For the whole 2015, GDP grew by 1.7 percent compared to the previous year, as expected.