- World markets monitor US-China trade tensions
- New Zealand business confidence drops to -20 in March
By Jonathan Russel
Volatility in the currency markets
There was some volatility seen yesterday in the forex markets. But as the dust settles, the Euro remains the strongest currency for the week, followed by the New Zealand Dollar and Sterling. On the other hand, the Japanese Yen and US Dollar are trading as the weakest currencies, followed not too far away by the Australian Dollar.
Markets digest US-China tensions
As the market gauges the developments of US-China trade tensions, US Commerce Secretary Wilbur Ross told Fox News that the US and China were “ending up with negotiated deals, not trade wars”. However, there were reports suggesting that the US is still looking to protect the domestic tech sector by curbing investment from China, by using an emergency law.
April a time to put a spring in Sterling’s step…
A notably pro-Sterling call has been issued by one of the world's largest dealers in foreign exchange as we approach a new month. They quoted, "April is approaching again, and Sterling tends to rally no matter what the political/macro backdrop."
This is following last week’s report by Deutsche Bank
, who is turning "tactically bullish" on Sterling against the Euro citing - amongst other reasons - that April tends to be a month in which the Pound outperforms its major rivals, and April 2018 should be no different.
The Bank of America has told clients they too are looking to "take advantage of this strong trend" and benefit on further gains by Sterling against the Dollar.
New Zealand Business Confidence low
Yesterday’s data was light, with the latest New Zealand business confidence report suggesting 2-3% annual growth. New Zealand business confidence also dropped to -20 in March, down from -19. That means a net 20% of businesses are pessimistic about the year ahead – not good for the New Zealand economy or its currency.
Coming up before the break…
In the run-up to the Easter break, there is a smattering of economic news in the form of the Confederation of British Industry’s (CBI) monthly snapshot of the UK retail sector and the latest US Gross Domestic Product figures. The US economy is expected to have grown by 2.7% in the fourth quarter on an annualised basis, up from 2.5%.