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US Dollar highest for almost a year

Published: Wednesday 20 June 2018

  • Sterling slips as May is challenged over Brexit bill
  • US Dollar strongest in 11 months overall
  • Central bankers meet in Portugal
​​By David Johnson

The House of Lords weakened the Pound yesterday as they sought a ‘meaningful’ vote on the final Brexit deal. No one has quite explained what that means, but it is ambiguous enough to slap the Pound down.  Sterling dropped to $1.3150 and €1.1350 and mounted a similar retreat against other currencies. Against the US Dollar, this is the Pound’s lowest ebb since December 2017. The only useful data for the UK today is the Confederation of British Industry (CBI) industrial trends survey, which ought to be a tad more upbeat than last month’s. GBP strength – of a sort – could follow.
US Dollar flying high

For its part, the USD is at its strongest for up to 11 months in some cases. In a day devoid of heavy hitting data, most eyes and ears will be tuned into the central bank forum in Sintra, Portugal. The heads of the European Central Bank (ECB) and Bank of Japan, plus a member of the US Federal Reserve will be speaking today. There is a little bit of existing home sales data from the US today and that is forecast to be positive, so even more US Dollar strength could assail us.
New Zealand economic growth likely to be lower

Overnight tonight the New Zealand economic growth data is forecast to be slightly weaker than the previous quarter. 0.5% quarterly growth is still pretty healthy in comparison to many countries though, so the New Zealand Dollar is unlikely to collapse on the news.

And if you are preparing your beach body for a summer holiday, can I remind you that on this day in 1975, the film ‘Jaws’ was first released. It included the awesome line, “we’re gonna need a bigger boat” and caused a wave of shark scare stories for years afterwards. Just before I scare you any more, there are normally just 80 shark attacks per year around the world and very few are fatal. On the other hand, 25,000 people are killed by household dogs each year. So you are probably much safer while the dog is in the boarding kennels and you are swimming in the sea.
Gone fishin

It’s very early Sunday morning. He gets up, dresses quietly so as not to wake his wife, gets his fishing tackle ready and his packed lunch made. He steps out the door and finds the rain pouring down. It is a mix of water sleet and snow and the wind is  blowing at over 50mph.

He curses and steps back into the house, quietly undresses and slips back into bed. There he cuddles up to his wife's back and whispers, "The weather out there is terrible". 

To which she sleepily replies, "Yep, can you believe my moron husband has still gone fishing in it?"

Today's Major Economic Releases

Market BST Data/Event Previous Expected
USD 13:30 US: Current Accounts -128b -129b
USD 15:00 US: Existing Home Sales 5.46m 5.52m
USD 15:30 US: Crude Oil Inventories -4.1m -2.1m
NZD 23:45 New Zealand: Gross Domestic Product 0.6% 0.5%

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