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December 2017

Sterling holds up on strong industrial confidence

Published: Tuesday 19 December 2017

  • Sterling holds up on strong industrial confidence
  • Aussie Dollar stable as Reserve Bank of Australia watches
  • New Zealand business confidence at eight year low
By  David Johnson

US Dollar weakens
The US Dollar remains weak as dissenters in the Federal Reserve question whether it is treating the 2.0% inflation target as a ceiling rather than a mid-range target. One member, Neel Kashkari, voiced his concern that the pre-emptive interest rate hikes might shorten the current economic growth cycle. We should see a slowdown in this afternoon's US housing market data, so no respite for the beleaguered USD just yet. 
Sterling stronger on positive economic results… again
Sterling held on to its gains after the Confederation of British Industry (CBI) Industrial Trends survey showed British order books at a 30 year high. That hardly sounds like an economy battered by Brexit, does it?  The UK data diary is quiet today, so we’ll see the Pound hefted and swayed by Brexit waffle in the interim.
Australia more confident about growth
Overnight news showed the Reserve Bank of Australia (RBA) reflected increased confidence over Australia’s economic and employment growth prospects but feel it is the pace of wage growth and its influence over inflation and consumer spending that will shape their thinking. For now the Aussie Dollar remains quite attractive for buyers.
New Zealand consumer confidence slides
By way of contrast, across the Tasman Sea, New Zealand’s business confidence remains at around an eight-year low and New Zealand consumer confidence took a hit after the election debacle. The Sterling – NZ Dollar rate remains just above 1.90 at the interbank level and we will have to wait until tonight to see New Zealand trade data, with the trade deficit expected to have narrowed marginally.
Today’s data diary
The diary for today includes the German IFO institute’s indices on business expectations and current conditions. They are always interesting. That, plus the Eurozone construction output data is about all she wrote for the European Trading session. I have already mentioned the US housing data – and then there is nothing much to talk about.
Oh, except the fact that Donald Trump has started drinking out of a glass holding it with both hands. It has sparked fears that he may be suffering from dementia. MAYBE!
Trumped up charge

A very well respected scientist was banned from cloning human volunteers, so he decided he would clone himself because no one would know. He succeeded and unveiled a perfect look-a-like clone.

However, the clone turned out to be very different in character. It swore all the time, kept exposing himself to people in the street, groped female assistants in the laboratory and made suggestive comments to any women it encountered.

The scientist had had enough, so he lured the clone up to the roof of the 18 storey university in which he was working and pushed it off to plummet to its death.

The police were called and he was charged with making an obscene clone fall. 

Today's Major Economic Releases

Market BST Data/Event Previous Expected
USD 13:30 US: Building Permits 1.32m 1.27m
USD 13:30 US: Current Account -123b -116b
USD 13:30 US: Housing Starts 1.29m 1.25m
NZD 21:45 New Zealand: Current Account -0.62b -4.22b
NZD 21:45 New Zealand: Trade Balance -871m -495m

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news