- USD steady ahead of tax bill vote
- NZD weaker as trade deficit unexpectedly widens
By David Johnson
US Dollar steadies but volatility likely
The US Dollar steadied and strengthened in some quarters as the potential for a tax policy deal looks more likely. With US existing home sales data due this afternoon and the vote for the tax bill perhaps being delayed until tomorrow, the USD may well be volatile over the next 48 hours. Also, traders are starting to unwind their open positions ahead of the Christmas break, so be ready for unexpected moves as well.
Beware festive currency markets…
While we are on the subject, the three days between Christmas and the New Year are notoriously unpredictable, because so few traders are at their desks, volumes are smaller and therefore even relatively small trades can move the market. This is an exceptionally good opportunity to use automated orders to grab your currency at attractive rates while you watch schmaltzy movies with the family.
Trade deficit disappoints New Zealand Dollar
Before all that though, we heard overnight that New Zealand’s trade deficit widened in November to NZ$1.19 billion against a forecast of NZ$550 million. That was a big disappointment and the NZ Dollar weakened on the news. Most notable in the data is a huge surge in imports; the weakening NZD is making those imports more expensive. The GBP-NZD rate is up around NZ$1.92 at the interbank level. Tonight’s NZ GDP growth data is forecast to be down to an annualised 2.4% and that is likely to further weaken the NZD. Beware.
Sterling susceptible to sharp market movements
Sterling is a little weaker this morning against the Euro but steady against the USD as we await the Confederation of British Industry’s (CBI) retail sector survey. The Distributive Trades survey is expected to be a tad down on last month’s impressive 30 index reading. With little else to focus on other than Brexit negotiations, the Pound will be susceptible to sharp rises and falls.
Would you like a selfie with that?
And narcissism is being taken to a new height by a coffee shop in Oxford Street, London. The Tea Terrace in the House of Fraser store will adorn the froth on your cappuccino with your own selfie. Be ready for a deluge of Facebook posts of selfie-ccinos. We can only hope that by eating themselves, these vainglorious people will actually disappear. Someone tell Piers Morgan and Kim Kardashian about the place, oh and the cast of all the TV reality shows and…