GBPEUR hits 21 month high

Not since February 2020 BC (that now means Before Covid), has the GBPEUR rate hit the heady height of 1.1870 but it did on Friday. That €1.1800 cap has finally been lifted and we have to wonder whether the obvious target of €1.20 will be attempted not that the Pound has created a base camp by finishing the week above the old ceiling. This morning’s news from Rightmove showed UK house prices of all varieties rose last month. That’s the first time it has happened since 2007. That 1.8% rise on the month helped stabilise the Pound at these elevated levels. News that British company failures are back down to pre-covid levels will also have helped. That’s all the UK data for today though, so a little bit of profit-taking is likely. As long as GBPEUR stays above €1.1800, the upward bias remains intact.

China’s economy slowing

We had a lot of overnight news from China though. Q3 economic growth slowed to 4.9% on the year; down from 7.9% in Q2. Industrial production grew by 3.1% in the year to September; down from 5.3% in the previous month and retail sales slowed as well. Such is the importance of China’s global demand for commodities that this has all weakened the commodity-related currencies. So we saw GBPAUD bounce to AUD 1.8570 overnight and GBPNZD followed suit. That pair starts Monday at NZD 1.9450. The GBPCAD rate is up a cent and a half on Friday at CAD 1.7035 and the GBPZAR rate is nearly 20 cents higher at ZAR 20.19.

Cad awaits housing data and BOC comments

The Canadian Dollar faces Canadian housing market data this afternoon as well as a speech from a member of the Bank of Canada’s governing council and the Bank of Canada’s Business Outlook Survey. So, it could be a lively afternoon. Broadly speaking, the range to watch is CAD 1.69 to CAD 1.7050.

There isn’t a lot of US data this afternoon. The GBPUSD will most likely be rangebound after the Pound mounted a recovery. GBPUSD starts Monday around $1.3740; the highest level since this time last month. Looking at the charts, $1.3850 is the next resistance level above there and $1.40 is the big psychological barrier to further GBP gains.

The main events for the coming week include UK consumer inflation and retail sales, the same data from Canada, the minutes from the last Reserve Bank of Australian meeting, Eurozone inflation, and the EU leaders summit. All of that will be interspersed with purchasing managers indices and a variety of housing market stats from the US. Wednesday will bring the publication of the Fed’s Beige Book; a regional view of the US economy. It’ll be enough to keep tongues wagging.

No more wizard for Christchurch

And you’ll be shocked to learn that Christchurch, New Zealand has decided to stop buying the services of a wizard. Ian Brackenbury Channell will cease to be paid by the city in December for his necromancy services. Don’t worry, I have looked it up for you and necromancy means ‘communicating with the dead to predict the future. I am still wondering why dead people from the past would know anything about the future but maybe I am a cynic. Sorry to hear he’s lost his job but I wonder if he knew it was coming.

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