Brexit not beating the Pound yet…
It has been all about the Pound and US Dollar this week. The Pound has been yo-yoing in response to Brexit negotiations news, as expected, but in a surprise in the currency economic climate, economic data has also helped support Sterling and push the Pound up against its currency rivals. It has gained against the Euro, US Dollar and Australasian currencies, including the Australian and New Zealand Dollars. Meanwhile, the US Dollar has dipped, not just in response to the continuing trade hostilities between the US and China, but also following disappointing US data. Rollercoaster or broken record? You decide…
The story so far…
The Pound’s prowess remains closely tied to Brexit banter, but draws strength from stronger economic performance, which is encouraging.
Brexit is also a deciding factor in the fortunes of the Euro, which has been suffering off the back of lackluster Eurozone data coming in well below expectations, as well as continuing political and trade concerns.
Interesting times in the Antipodes
Australia and New Zealand are also having an interesting time, as far as their currencies and economies are concerned.
New Zealand’s latest economic data surprised markets with its better than expected inflation results, although the New Zealand Dollar has been weakening, and that has influenced the price of imports and exports.
Over in Australia, the Reserve Bank of Australia has finally given a firmer hint that their next interest rate decision will mean a rise from the historical lows that have gone on, and on, and on… This has not really strengthened the Australian Dollar, however. Curioser and curioser…
US Dollar and markets disappointed by data
The US Retail Sales figures, which were hotly anticipated and predicted to show a steep rise, came in way below expectations, at only 0.1%, compared to the 0.7% predicted. Ouch! Manufacturing figures helped balance this sharp fall a little, showing over 2% growth, but with all the geopolitical factors at play, the US Dollar remains vulnerable to shocks from market and central bank announcements, more politicking and ongoing trade/security tensions. Troubling times.
What to watch this week…
Watch out for lots of US data this week, which has the potential to move the US Dollar further, along with influences from important Japanese data, with the Japanese Yen the US Dollar’s main rival in troubled markets.
There will also be a number of UK Price Indices released later this week, which, if positive, could add further fuel to the Pound.
Key Chinese economic data will have an impact on the commodity currencies, especially the Australian Dollar, which will also have to contend with business confidence and employment data, often market movers.
There will be more action from the Eurozone towards the end of the week, with a glimpse into EU economic strength and financial committee announcements. But there will be much more to come for the Euro early next week, so we could see the single currency treading water until Brexit news or any major developments come in to play before the next wave of economic results.
We have been shining a spotlight on the manufacturing sector recently, alongside our trusted accountancy and advisory partners, MHA MacIntyre Hudson, law firm Irwin Mitchell, and a number of key industry experts.
How is manufacturing contributing to the UK economy?
We have analysed the latest manufacturing sector data
and considering how manufacturers in the UK can survive and thrive despite global trade and Brexit concerns. The commentary also featured in the manufacturing media.
Manufacturing the future
Our recent guest article
for our accountancy partners, MHA MacIntyre Hudson, highlights insights and takeaways from recent industry events, the annual Cranfield Manufacturing Debate, and a panel session on the future of the industry in Milton Keynes, bringing together a number of industry experts and commentators to debate and identify next steps. The article appeared in the second edition of their manufacturing and engineering publication, The Engine.
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