GBP – EUR Fundamentals
UK• Growth buoyant but reliant on EU recovery• BOE under pressure to raise rates• Fears over housing bubble – rate hikes and lending rules of
limited use• Uncertainty over Scottish vote• Fears of a hollow recovery
EU
• Risk of Deflation pressuring ECB to add liquidity• Disparity between Germany and the rest of Europe• Savage unemployment weighing on recovery• Reserve holdings supporting Euro
GBP – USD Fundamentals
UK• Growth buoyant but reliant on EU recovery• BOE under pressure to raise rates• Fears over housing bubble – rate hikes and lending rules of
limited use• Uncertainty over Scottish vote• A consumer only recovery?
US
• Economic recovery lacks robustness• Housing and labour market lag other sectors• Erratic data worrying traders• Speculation over Fed ‘Tapering’ weighing on USD
GBP – USD Fundamentals
EU• Risk of Deflation pressuring ECB to add liquidity• Disparity between Germany and the rest of Europe• Savage unemployment weighing on recovery• Reserve holdings supporting Euro
US
• Economic recovery lacks robustness• Housing and labour market lag other sectors• Erratic data worrying traders• Speculation over Fed ‘Tapering’ weighing on USD
Other Influences
China• Slowing inflation and slower demand• Weakening Aussie, Kiwi and Asian currencies• Weaker commodity currencies – Rand and Canadian Dollar• Impact of slower Europe and US
Other Markets• Commodities• Bonds• Yields NZ and AU interest rates on the rise