- Quiet start to the week
- Strong US job creation in November
- New Zealand strengthens as Adrian Orr named new Reserve Bank Governor
By Jonathan Russel
The forex markets opened the week relatively quietly. Sterling is trading mildly firmer but there is no clear reason for this renewed strength. The Euro recovered mildly too but it's kept below 1.1814 resistance against dollar so far. The calendar is relatively light today and trading could remain subdued. But activity will quickly increase as a busy week starts on Tuesday.
British Chambers of Commerce director general, Dr Adam Marshall, said that "despite last week's deal, Brexit uncertainty still lingers over business communities, and is undermining many firms' investment decisions and confidence." Dr Marshall added that "despite pockets of resilience and success, and strong results for some UK firms, the bigger picture is one of slow economic growth amid uncertain trading conditions." The lobby group also forecasts the Bank of England (BoE) to keep interest rates on hold until end of 2019 and has downgraded 2018 growth projection from 1.2% to 1.1%.
Friday’s key US employment data showed stronger job creation than had been expected, but disappointing wage data took some of the shine off. The US added 228,000 new jobs in November against a projection of 198,000. This is good news for the Federal Reserve (Fed) which is due to meet this week and is almost certain to raise interest rates.
The New Zealand Dollar soared after from news that Adrian Orr will take over as head of the Reserve Bank of New Zealand in late March, 2018. Mr. Orr extensive experience that likely explains the Kiwi’s response to the announcement. Orr is well-known in the business economic community as the long-running chief executive of the New Zealand Superannuation Fund and is touted to having the 'skills to successfully lead the Reserve Bank through a period of change'.
Finally, four central banks will feature in a busy week ahead. The Federal Reserve (Fed), European Central Bank (ECB), Bank of England (BoE) and Swiss National Bank (SNB) will meet and there are heavy data including US and UK Consumer Price Index (CPI) to be featured.