IMF gives coalition a thumbs up Tag Archive

  • This weeks currency related news

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    The UK had a nice surprise from the IMF this week as it raised its forecast for UK growth from 1.9% to 2.4% and expects growth of 2.2% for next year. The IMF are usually seen as being conservative, so analysts jumped on this and are now expecting even higher actual figures.

    The US also got an upgrade from 2.6% to 2.8%. However the news meant further gains for the Pound against the Dollar as well as highs against several other currencies such as the Euro, Aussie Dollar and Canadian Dollar, as the coalition Government gets the seal of approval on the way it is handling the economy.

    There were words of warning from other analysts though that point to the fact that much of this growth is funded with artificially cheap money and record low interest rates, which is turn is fuelling an overheating housing market. Whether the economy would experience similar growth without this stimulation is in doubt.

    The Canadian central bank, Bank of Canada, is experiencing similar problems to that of the UK on whether stopping financial stimulus would halt growth. Their rates are at 1% and they are expected to continue other stimulus methods.

    Further afield the Japanese government’s financial stimulus is having its intended result in weakening the Yen and there for making their exports more competitive. The Nikkei rose over 1% today with major exporters such as Toyota leading the way.

     

     

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