- US Dollar stronger across the board
- Euro slips as problems weigh in France
By David Johnson
Huge congratulations to the Duke and Duchess of Cambridge on the birth of their third child, massive congratulations to the Duchess’s stylists and wardrobe people for making her look like a woman who had most definitely not just given birth when she left hospital. Oh, and while we are handing out pats on the back, well done to the BBC for pretty much ignoring St George’s Day. Can you withhold a bit of your licence fee when they do things like that? I think we ought to be able to.
How is the Pound really doing?
As far as the markets were concerned, none of the above had any impact. The most notable movement we were watching was the Pound sliding four cents against the US Dollar in a week. The markets seem to be a bit unsure as to the reason for the drop. UK/EU customs union rhetoric is one aspect, talk of ‘sticking points’ in the Brexit negotiations are another, but the US Dollar is also generally stronger (EURUSD is down a cent too), so that too has an impact. Over the week, the drop looks dramatic, but over the year, Sterling has gained from around 1.31, peaking at 1.43 and stepping back a third of that gain. So let’s not get too carried away. Government borrowing data is due this morning and that may show a small increase in borrowing, but that shouldn’t trouble the Pound too much.
Could US Dollar strength slip away?
The US Dollar strength may ebb a tad later in the day after consumer confidence data is released. The forecasts are a little poorer than previously, but that may could be counterbalanced by what are expected to be upbeat new home sales data.
Australian Dollar shuffles slightly
We heard overnight that Australian inflation slowed a little in Q1 but is still rising at 0.4% in the three months to March. That gives Australia a 1.9% annual rate; unchanged from last quarter. The Australian Dollar shuffled a little on the news, but was largely unchanged.
Euro faces more pressure today
This morning brings the German Ifo Business Sentiment Indices. These are well respected indicators of business confidence and, as Germany is the largest country in the Eurozone and EU, it is important data. France is the second largest Eurozone country and while President Macron continues his relationship with his new bestie, Donald, in America, strikes on French trains and airlines and amongst students are causing mayhem back home. That is undoubtedly playing into the weakened Euro.
Top Trumps – Melania edition
That’s about it. I heard an expression this morning that I couldn’t fit into this report but I wanted to share because it made me laugh. The chap was describing something that had hardened with age and he used this line, “It’s stiffer than Melania in a hug-your-husband contest”.