Date: Friday 09 Jul 2010
The euro hit a two-month high against the dollar Thursday following soothing comments from European central bank President Jean-Claude Trichet on bank stress tests and the ECB’s liquidity programme.Eurozone interest rates were kept at a record low, as they were in the UK, but it was all eyes on Trichet in the post-decision press conference.
Traders said that because he spent much of the time talking about the importance of the stress tests, they think the tests will yield good results and restore confidence to the banking sector.
EU regulators have said 91 European banks will be subject to the tests aimed at finding out how well they could cope with another financial disaster.
Decent jobs data out of both the US and Australia also had investors switching funds out of safe havens like the dollar, the yen and gold and into stocks.
But sterling couldn’t hold onto a fresh two-month high against the greenback as mixed data and the unchanged rate decision eventually pulled the pound lower.
British industrial output rose again in May to hit its highest rate of growth in nearly ten years. According to the Office of National Statistics, production rose by 0.7%, almost twice forecasts, lifting the annual rate to 2.6%, the fastest growth rate since June 2000. Annual manufacturing output hit a 15-year high of 4.3%.
But that news was offset by news that house prices fell for the third month running in June, according to the Halifax.
Prices dropped by 0.6% to follow a 0.5% decline in May. The fall cut the annual rate of increase to 6.3%, down from a 6.9% increase in May. 
No comments:
Post a Comment