Eurozone News

Euro Sign. European Central Bank (ECB)

Euro fell on ECB’s cautious approach

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  Coronavirus fears affect Chinese financial markets The Pound strengthens on latest Brexit news   The Euro fell this morning against the US Dollar to the lowest it has been in weeks, following a more cautious approach…

Japanese Yen and other currencies beat Dollar

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The US Dollar fell in early trading as Asian markets considered continued concerns about the US-China trade wars and markets have turned to alternative risk-friendly currencies. The Japanese Yen, and Gold, often viewed as the ultimate ‘safe haven' in many investors’ minds, benefitted. Even Sterling strengthened against its American currency counterpart, thanks to weaker currency partners and a pick-me-up from the political polls. The election uncertainty continues to set Sterling’s fortunes.

Much more for markets before there is time to be thankful

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You would be forgiven for thinking that it may be quiet in the US for Thanksgiving week, but there are a number of key economic announcements expected and, as always, a public holiday can lead to increased activity in the currency markets

30 sleeps until Christmas, 17 to Election Day

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Only 30 sleeps to Christmas and 17 to the Brexit vote. We can only dream the turnout is as huge as the 71% of Hong Kong citizens who turned out, queued for hours and gave the establishment a bloody nose by rejecting the old guard. With that kind of participation and a decisive result, maybe the debate over what the British public believed or did not believe in June 2016 can be put to rest. The Hong Kong Dollar, which had been gently strengthening over the past few weeks, weakened significantly as the results were announced. Clearly no one believes this is the end of Hong Kong’s problems.

Sterling banknotes

Sterling ignores Labour’s big spending manifesto

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The markets largely ignored the launch of the Labour party’s big spending manifesto yesterday. A Tory majority is roughly a 2:1 bet in the financial markets, so labour’s plans are seen as a wish list which is unlikely to be fulfilled but there’s many a slip twixt cup and lip as grandmothers used to say. Hence. Sterling is pretty much where it was at the start of yesterday’s trade.  That may change when we see this morning’s manufacturing and service sector PMI releases. The ‘no change’ point in these index is 50. Last month’s manufacturing reading was 49.6 and the service one was a flat 50.0. Anything above that will be good for the Pound.

Trade and political tensions driving currency markets

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The data diary for the US is light this week, in the run up to the Thanksgiving holiday, but some key announcements include Tuesday’s home construction figures and the Jobless Claims report due on Thursday. Housing starts showed a drop for September, which was hoped to be a temporary blip, so those keeping a close eye on the US markets will have been relieved to see a significant rebound this time around, with building permits up to the highest level since 2007.

Political shifts could put pressure on the Pound

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Signs of political shifts are the focus for UK news in the run up to the General Election. It seems from a new poll that more “working classes” are supporting the Conservative Party, rather than their traditional supporter base of “upper classes”. A survey by ComRes for The Daily Telegraph reported an eight percent increase in voters in the DE socio-economic group are willing to vote for the Conservatives in the 12th December election, compared to the previous election in 2017. In contrast, the number of voters in the AB group saying they support Boris Johnson’s party has fallen by six percent since they voted for Theresa May’s Conservatives in 2017, and the Centre for Social Justice has also found in their survey last week that support for Jeremy Corbyn’s Labour Party has fallen ten percent with voters on a total income below £17,000.

Sterling and NZD start week surprise strongest currencies

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The week started slowly on the data and economic front, with Veterans Day in the USA and a number of public holidays across the globe to remember those we lost in past conflicts.  This didn’t stop currency or stock markets  from moving, however, or indeed stop politics from influencing these market movements.

Reserve Bank of New Zealand surprises by doing nothing

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The Conservative Party extended their lead in most polls after the Brexit party’s decision to stand down most of their candidates. Nigel Farage is suggesting the Tories should stand down their own candidates in constituencies where they haven’t won for 100 years to improve the Brexit party’s chances where they are fielding candidates. Either way, the Pound held on to its gains yesterday after the unemployment rate fell to 3.8%, but average earnings growth slowed to 3.6%; lower, but still more than double the rate of inflation. Speaking of which, we will get the UK consumer price inflation data this morning. Something like 1.7% is the most likely outcome. Sterling should maintain its strength unless the actual data disappoints.

Nigel Farage gives Sterling a boost

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Nigel Farage gave Sterling a boost yesterday by announcing that he will not field candidates in Conservative held seats but will challenge labour seats with Brexit party candidates. Sterling’s rise doesn’t necessarily mean the markets favour the Tory party, as some have suggested. It does mean though that the certainty that comes from an overall majority is more to the liking of finance markets that hung parliaments or minority governments and the uncertainty those outcomes elicit.