Positive suprises should mean the Bank of England keeps its current monetary policy on hold, buoying the pound and pushing cable higher, but negative factors still remain and will weigh on the currency once positive impulses run their course, says Morgan Stanley's Ian Stannard. LONDON, ENGLAND, UNITED KINGDOM (MAY 9, 2013) (REUTERS) - MORGAN STANLEY HEAD OF EUROPEAN FX STRATEGY, IAN STANNARD, SAYING: JOURNALIST ASKING QUESTION: "Is the bank going to wait for Mark Carneybefore it does more QE?" JOURNALIST: "What about the Eurozone now and where the Euro's going?Slovenia, going to present its new reforms today. Will they do enough to avoid a bailout and wider repercussions?" STANNARD: "As far as the Euro is concerned, we're going to obviously continue to have issues at the periphery of Europe. That's going to be an ongoing problem which is going to come back to weigh on the Euro. But what we have noticed recently is that the Euro has decoupled a little bit from some of those issues and decoupled from the developments within the peripheral bond markets recently as well. So the Euro's not actually being impacted quite so much by those developments of the periphery of Europe. As the focus is switched more back onto the core of Europe particularly with the recent data swings which we've seen since the beginning of the year. Obviously there was some initial negative data coming from Germany and the core countries of Europe which had been weighing on the Euro. They stabilized a little bit recently but I would be paying a lot of attention to the German export data which is due out tomorrow given that we've seen export data globally starting to slow down with the exception of China, which has gone a little bit against the trends. So it'd be interesting to see if how that German data comes in. If that comes in weak, then I'd actually expect the Euro to come back under pressure once again. So again, we are quite cautious with regards to this Euro recovery." |
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