by Jon Beddell
Foreign Currency Market Update – GBP / TRY Update
The much awaited European bank stress tests were completed on Friday. All major banks passed the tests including the four major UK banks that took part. Also giving the pound a boost on Friday was a strong second quarter GDP figure. Growth came in at 1.1%, nearly double the 0.6% that analysts had been expecting. Also beating market expectations were June retail sales, which rose 0.7% against 0.5% expected.
Tempering the positive mood a report from Hometrack showed a 0.1% fall in house prices in July, and predictions of further modest price falls in the second half of the year. A general feeling that the government’s austerity measures will dent growth is also lingering over sterling and limiting gains.
Turkish central bank governor responded to criticism last week as exporters argued that the Turkish currency should be fixed rather than free floating. Arguing that in real terms the currency index has been relatively stable since 2003, the governor said that “Turkey has protected its competitive force in foreign trade.”
David Cameron was in Turkey yesterday meeting his counterpart, and delivered a speech strongly backing Turkey’s bid to join the EU.
Data for the week ahead is light on the UK front, with mortgage approvals and consumer confidence figures likely to attract the most scrutiny on Thursday. On the other side of the channel the main items are German retail sales (Tue’) inflation data (Wed’) and unemployment (Thur’).
Related posts:
