Watch Daily Market Review By Tom Williams
Bank of England to Announce Rate Decision Tomorrow
England`s central bank is set to declare its official rate decision for the coming month on 10 October 2013. At this time, most experts believe that the rate will remain unchanged from what it has been during the previous number of months.
Analysts remind readers that the rate decision covers the overnight borrowing rates between banks and is influential on all borrowing rates, including those of short term loans and mortgages. As such, any changes to the rate can be considered to have a significant effect on the flow of cash between institutions and the general public, as well as for intra-industry bodies.
Analysts do not believe that the monetary body at the Bank of England has any particular interest at this moment to attempt to make any adjustments to the interest rate, nor towards the monetary policy in general. This is due to the fact that there has been a steady flow of positive reports in recent months that point towards a positive recovery, including manufacturing reports and rising housing prices.
As such, it is unlikely that the release of the rate decision will serve to add any significant volatility to either the pound in its trading or the market in general.
Australian Employment Reports to be Issued on 10 October
The monthly reports covering the state of employment in Australia are due to be released tomorrow 10 October 2013, hopefully providing economists and policy makers with a clearer picture of the country?s economic health. Among the reports that are to be issued tomorrow are the Unemployment Rate and the Unemployment Change reports.
Currently, many experts do not believe that the percentage of the overall unemployment rate will be significantly altered, despite their conjecture that there has been a positive reversal in the direction of employment, moving from consistent losses in previous months to a slight gain with some thought to have been jobs added.
Analysts note that the Aussie has faced growing difficulties in its recent trading, partially compounded by the current crisis in the US over the debt limit. Should the reports that the change in employment has indeed reversed itself, it may help to improve the perception of the Aussie.
That said, analysts believe that due to the strengthening Yen and the ongoing short selling of the Aussie by investors, the beleaguered currency is likely to face continued difficulties in its pairings against its rivals for the coming term.
Yellen Nominated to Take Over Fed Following Bernake
It was announced on 8 October 2013 that President Barack Obama has decided to nominate current Federal Reserve Vice Chairwoman Janet Yellen to replace current Chairman Ben S. Bernake when his term ends at the beginning of 2014.
In the time since the announcement, many Democrats are reported to have come forward praising her nomination, pledging to work to push her through the confirmation process as quickly as possible. Responses by the opposing Republicans have been muted at the time of this writing. It should be noted that all candidates for the lead role at the chief monetary body must be approved in the Senate before taking office. This process can at times be grueling and is often the subject of deep political horse trading and strife.
Yellen is thought to be a strong dove when it comes to her approach to handling the economy, and was the main proponent behind the quantitative easing measures that lead the stimulus activities taken by the Fed to help push back against the recession. As such, analysts agree with many experts who have expressed that she is unlikely to work to speed up the Fed`s drawing down from their involvement in the economy into the near future. Many believe that she will work to keep interest rates low during the course of her term, and is more likely to continue keep stimulus measures in place until the economy shows significant signs that it is back on the course to a stronger recovery.
Analysts note that many global experts have expressed concerns over what a reversal of the US`s FOMC`s monetary policy may entail for their own currencies, should Yellen lead the Fed to continue the stimulus at current or higher levels. Readers are reminded that in the past few months, current Chairman Bernake has led a cautious move towards potential reductions in the quantitative easing measures that have excited investors, helping to bring many of them back to the USD.
Analysts believe that should Yellen`s nomination be passed as many expect at this time that it will be, then there exists a strong likelihood that there will be added volatility to the global currency market. Traders are advised to closely observe the nomination process as analysts will continue to follow this story as it develops.