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December 2017

Sterling slips after last week’s rally

Published: Monday 04 December 2017

  • Sterling slips after last week’s rally
  • US tax bill boosts the US Dollar
  • Aussie data strengthens Australian Dollar ahead of Reserve Bank of Australia meeting
By David Johnson

 Growth for US manufacturing sector
 
The Institute for Supply Management (ISM) Manufacturing Index showed solid growth in US manufacturing in November. That was one contributing factor to the gains the US Dollar has made over the last few days. The other factor is that the US Senate has approved the new tax laws, which have received mixed reactions. Sizeable tax cuts for business and high earners appear not to be matched by similar cuts for those on moderate incomes. As with all tax laws, the devil is in the detail and I am no US tax expert. What we do know is that today brings US factory and durable goods data; all of which is forecast to be lacklustre. Maybe the USD will give up some of its gains through the afternoon trading session.
 
Euro loses its sparkle
 
The Euro lost some of its lustre over the past week as well, in spite of rumours that the Brexit deal is more than 80% complete. Data from the Eurozone has been mixed, but generally positive. However, today’s producer price index is forecast to be a little weaker than the previous month, so we may see further Euro weakness on the back of that.
 
Sterling slips again
 
Sterling slipped over the latter part of last week and is weaker again this morning. There is a void in the data diary for the UK today, but the week ahead promises plenty of volatility. Purchasing Managers Indices (PMI), manufacturing, industrial and more data is set to assail us. So, too, with the National Institute of Economic and Social Research (NIESR) estimate of Gross Domestic Product (GDP) growth and that is very important. Especially since the UK Chancellor of the Exchequer downgraded his growth forecasts and the Confederation of British Industry (CBI) added its concerns.
 
Australian Dollar receives a boost
 
Overnight we heard that Australian job adverts are at a six year high and that, combined with higher iron ore prices, plus a rise in wholesale inventories, boosted the Aussie Dollar. The GBPAUD rate slipped from A$1.79 on Thursday to A$1.767 this morning. It is not going to cause an interest rate hike when the Reserve Bank of Australia (RBA) meets tonight, but it may affect the tone of their statement and that has the potential to further strengthen the AUD. We are also expecting stronger retail sales data from Australia, so beware if you are an Aussie Dollar buyer.
 
Grand Theft Auto Fail
 
And a car thief in Santa Ana in America gave the game away when he was spotted begging for petrol money in a petrol station beside the Ferrari 458 spider he had stolen. What was even more revealing was that he couldn’t work out how to refuel the car. Now come on; if you are going to play at Grand Theft Auto, at least do your homework and make an effort to look the part. 

 
Cured
 
Mike went to a psychiatrist. He said, "Every time I get into bed, I think there's somebody under it. I check under the bed 10 times a night. I can’t help myself. You gotta help me, I'm going crazy!"
"Just put yourself in my hands for, I think, no more than six months." said the shrink. "Come to me three times a week, and I'm sure we can cure you of this extreme paranoia."
"How much do you charge?"
"Two hundred pounds per hour."
"I'm not sure I can afford it," said Mike. “I’ll come back to you.”
Six months later, the doctor met Mike on the street. "Why didn't you ever come to see me again?" asked the psychiatrist.
"I worked it out. Your treatment was going to cost nearly sixteen grand, but the barman from my local pub fixed things for a £10 tip."
"Is that so?” said the shrink. “And how, might I ask, did this untrained barman manage that?"
"He helped me cut the legs off the bed!"
 
Halo Advent Calendar 4th December
 
And after some technical difficulties on Friday, we’re offering you another chance to take part in the Festive Film Quiz behind today’s Advent Calendar Door:
 
The first entrant to send back all the correct answers wins a festive case of wine!
 

Answers and winner announced in Tomorrow’s update…
 
  1. Who played Father Christmas in the 1994 remake of Miracle on 34th Street?
  2. What is the name of the department store where Buddy the Elf works?
  3. What was the best-selling toy gone wrong made by Patch in Santa Claus the Movie?
  4. What is the name of the head elf in The Santa Clause?
  5. How many Home Alone movies are there?
  6. Who provides the lead male voice and narration in The Polar Express?
  7. What is the name of the character Jude Law plays with his children in The Holiday?
  8. What is the name of the people in the village that make the Grinch grumpy?
  9. Which now-deceased mega star provided an intro to The Snowman?
  10.  Which famous Hollywood dancer and actress turned down the female lead in It’s a Wonderful Life, saying it was “too bland”?

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR All Day Eurogroup Meetings    
EUR 09:30 EU: Sentix Investor Confidence 34.0 32.3
GBP 09:30 UK: Construction Purchasing Managers' Index 50.8 51.2
EUR 10:00 EU: Producer Price Index 0.6% 0.4%
USD 15:00 US: Factory Orders 1.4% -0.3%

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