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August 2017

Weekly Currency Insights from Halo Financial

Published: Friday 25 August 2017

What you may have missed…
  • Jackson Hole economic conference speeches key to future policy
  • What next for the Pound?
By Rachael Kinsella
 
Jackson Hole economic conference speeches key to future policy

With all eyes currently on the Jackson Hole Economic Symposium in the US, markets are watching and waiting to see what monetary policy nuggets, if any, come from Janet Yellen and Mario Draghi, representing the US and EU central banks, respectively. The Economic Symposium has a reputation for speeches that set the tone and shape of significant monetary policy changes, for example, Quantitative Easing (QE). Yellen is speaking at 3pm UK time and Draghi at 8pm UK time.

US Durable Goods data is also expected this afternoon, likely to be overshadowed by the discussions at the symposium.

What next for the Pound?

There is also a Bank Holiday in England, Northern Ireland, and Wales on Monday 28th August, so it will be interesting to see if economic and political events elsewhere continue to affect the strength of the Pound. Make sure you keep an eye on what’s happening and plan ahead of any currency trades.

Coming up next week, Manufacturing Purchasing Managers’ Indices results are expected across the globe, with the UK and Eurozone data results being posted on 1st September, followed by Construction and Services PMI the week after.

The Office for National Statistics (ONS) also releases jobs data for the UK on 30th August.

Crucially for the UK and the Pound, Brexit negotiations continue on 29thAugust.

Trade negotiations got off to a shaky start, with much media speculation.

One key point raised in new proposals is that the UK plans to allow visa-free travel into the UK for citizens of EU post-Brexit. The plans outline that  temporary visitors to the UK from the EU will not need a visa, although the new proposals also suggest that EU citizens planning to live and work in the UK would need to apply for the relevant permissions.
 
 
 
What you may have missed…

Sterling still struggling…

Sterling fell to eight-year lows against the Euro around 1.08 and struggled against all its currency pairings, notably the US Dollar, falling below 1.28 for the first time in three months.  UK Gross Domestic Product (GDP) growth was downgraded. A drop in retail sales results only added to Sterling’s woes. At the same time, Eurozone economic results revealed flying colours; this was in stark contrast to disappointing Eurozone data released earlier in the weak, which had a negative effect on the Euro.

Businesses confident in Australia, but consumers less so

Down Under, business confidence remains very strong, as the Australian Dollar remains strong and the housing market continues to boom. However, Australian consumers revealed they are feeling the pinch in the most recent consumer confidence survey, as energy prices and poor wage growth take their toll.

Searching for a safe haven?

Both the US Dollar and the Japanese Yen benefitted rom the US-North Korea tensions, as markets moved towards the currencies traditionally turned to as a “safe haven”.

Bank Holiday Opening Times

Monday 28th August – Closed
Tuesday 29th August – 08:30 – 20:00
Wednesday 30th August – Open as usual

Digging deep

A sweet little girl is out in the back garden, digging a big deep hole.
A neighbour looks over the fence and says, “Why are you digging that big deep hole?”
“My goldfish died,” the sweet little girl says, with a sob.
“I'm really sorry to hear that,” the neighbour says, “but why such a big deep hole for a goldfish?”
The little girl gives him an evil look. “Because it's inside your cat.”