- Confederation of British Industry industrial trends forecast to be weaker
- Purchasing Managers’ Index data awaited from EU
- Sterling at the mercy of world politics, not data
- New Zealand Dollar buyers, beware
By David Johnson
US Dollar strengthens again on trade tensions
The US Dollar strengthened yesterday, despite US existing home sales numbers falling short of expectations. Rising tensions around the world over trade; almost exclusively related to the US President’s propensity to make policy a-la-Tweet, are behind the USD’s strength. Investors head for the safety of US treasuries when global tensions are high and that appears to be the pattern here. Having Iran rattling its sabres is also part of the problem. The forecast for this afternoon’s US data (manufacturing and service sector Purchasing Managers’ Indices) are quite mixed, so we will still be watching trade wars and threats and counter threat for clues as to the US Dollar’s direction.
Sterling at the mercy of world politics, not data
Sterling starts the day at around $1.31 and €1.12 and the Confederation of British Industry (CBI) industrial trends survey is the only piece of tier one data to focus on. That is forecast to show a slowdown compared to June. However, politics will trump (no pun intended) anything statistical right now. So the Prime Minister and all her loyal cabinet team plus EU speakers will hold sway over the value of the Pound and Euro.
Euro likely to weaken on latest data
There is some European data today, though. We will get Purchasing Managers’ Indices (PMI) on the manufacturing and service sectors, plus a composite index this morning. All are forecast to be a tad weaker than June’s data and the Euro is likely to react negatively to that.
New Zealand Dollar buyers, beware
Once the EU and US data releases are out of the way, we will see trade and employment data for New Zealand. A small growth in employment and potentially a small drop in the unemployment rate to 4.4% are possibilities, so New Zealand Dollar strength before dawn is also possible. Beware if you are a New Zealand Dollar buyer.
And, as we swelter in the EU-wide heatwave, this story will cool you down. K2 is the second highest peak in the world and roughly 25% of those who climb it perish in the attempt. So imagine climbing it and then ski-ing back down the 28,000 feet to the base. Well, that’s what Andrzej Bargiel did last Saturday. It was his second attempt and, having completed the challenge, he is said to have commented that he doesn’t need to come back. With the odds stacked that heavily against you, I don’t blame you, Andrzej.