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December 2015

Daily Currency Insight

Published: Wednesday 09 December 2015

  • Sterling slips on manufacturing slowdown
  • Aussie consumer confidence slips
  • NZ interest rate cut expected tonight
We start Wednesday with commentators telling us that UK petrol pump prices will fall below £1.00 a litre by the year end. That'd be an 8 year low and might be pretty handy if your family is as scattered as mine.
Sadly that is unlikely to lift the Pound which has suffered after the British Chambers of Commerce downgraded their growth forecast for the UK economy.That drop in forecast from 2.6% to 2.4% doesn't sound a lot but this is the stage of recovery when the government would like to start seeing uplifted numbers and not the opposite. Sterling was buoyed somewhat by yesterday's unexpectedly positive industrial output data although the fall in manufacturing output was a disappointment. There is no meaningful UK data today so Sterling may ebb a little.
We heard overnight that Australian consumer confidence dipped this month in comparison with November. This will add to the pressure on the Reserve Bank of Australia to cut their base rate to try to keep the economic wheels turning in Australia. The Sterling – Australian Dollar rate has bounced from last week's dip and seems set to test A$2.10 in the days ahead; always assuming the Bank of England does do anything crazy tomorrow.
The other overnight news was a positive Chinese inflation report which some will say, demonstrates the stimulus packages being implemented by the Chinese authorities are bearing fruit. That is debatable and one set of stats doesn't paint an entire picture but this data did serve to steady the ship across Asian markets.
Tonight's big news will come from New Zealand. It is widely expected that the Reserve Bank of New Zealand will cut its base rate by 25 basis points tonight and that could cause a spike in the Sterling – NZ Dollar rate. However, so widely expected is this move that any spike could well be temporary. Those with an urgent requirement may want to place an automated order to grab a bargain.
That's about the lot for today other than to offer a couple of other Donald trump quotes. This is not an exhaustive list of stupidity but it is probably sufficient. He said this creepy thing about his daughter, “I’ve said if Ivanka weren’t my daughter, perhaps I’d be dating her.” He tweeted this about Bette Midler, "While @BetteMidler is an extremely unattractive woman, I refuse to say that because I always insist on being politically correct." And he tweeted this about global warming, "The concept of global warming was created by and for the Chinese in order to make US manufacturing non-competitive." I can't help conclude that voting for Mr Trump would be like taking a lifestyle choice advice from a post-fight, self-promoting boxer.
Banking problem
Jack left school at 15, never passed an exam, couldn't read very well and couldn't write at all but he had a great head for business. He built up an empire of 10 shops through business acumen and sheer hard work and at the age of 40, he was a multi-millionaire who still couldn't write his own name.
Then one day the phone rang and it was his bank manager. "Good Morning Jack," can I ask you to come in to the branch please? We think someone is trying to access your account."
Jack was in the car like a shot and arrived at the bank in 10 minutes. He was shown into the manager's office and the Branch Manager, explained the problem. "Thanks for coming in so promptly. The problem is these cheques." The Manager waved four cheques in front of him. "They don't appear to have been written by you."
"Well you know I can't write," said Jack. "I get my secretary Christine to write them and I sign them."
"Yes", said the manager but you always sign your cheques with two Xs. XX is what we expect to see and you lean them slightly to the right. These cheques are signed with Xs that lean to the right like yours but there are three of them".
"Oh, is that all", said Jack. "That's my wife's idea. She said that now we are worth so much money we ought to have a double barrelled surname".