- Canada's economy slows
- Sterling drops on 'Leave' vote advances
- Aussie GDP growth beats expectations
A poll showing gains in the 'Leave' campaign ahead of the EU referendum caused the Pound to dive yesterday. We will have to see whether this morning's Bank of England report and UK mortgage data has any impact on that fall. If the forecasters have got their crystal balls working perfectly, the data will be a tad worse than previously and Sterling will slip a little further.
The Pound's falls were enhanced by a drop in oil prices which boosted the US Dollar. The release this evening of the Federal Reserve's Beige Book may well boost the USD further. If the regional view of the economy is positive, the Fed will be under pressure to deliver an interest rate hike when they meet in a fortnight's time. This afternoon's ISM manufacturing sentiment index will have a bearing on that though. The forecast is poor, so weakness in the USD may ensue, for the short term at least.
The Sterling – Australian Dollar rate fell overnight as well after Aussie economic growth was much better than forecast in the 1st quarter of the year. The markets were expecting 0.8% quarterly growth but we got 1.1%. With export markets still a little weak, the domestic economy seems to have picked up the slack and lower interest rates are definitely playing their part. This may delay or obviate the need for another interest rate cut, so further AUD strength is highly likely although Australian manufacturing data showed a slowdown in May, so maybe traders will be more cautious.
Yesterday's other big news was a very poor set of Canadian economic growth data. The markets were expecting GDP growth of 2.9% but the actual number was just 2.4%. That would have had a greater negative effect on the Canadian Dollar, were it not for the poor performance of the Pound. For Canadian Dollar sellers have a window of opportunity this morning. Contact your Halo Financial Consultant for more information.
And it was really sad news to hear of the death of Carla Lane. Quite apart from being the writer of beautiful gentle comedy, she was also a headline act when it comes to animal welfare and I have admired her work for decades. The statement from Carla's family is lovely, "With heavy hearts we said goodbye to our darling Carla today, but with smiles on our faces we also take this opportunity to reflect on her incredible achievements all of which make us so unbelievably proud to be part of her family."
A teenager stands beside his dying grandpa's bed and asks him how he managed to get to 127 years old. "Well," said a croaky Grandpa, "every morning, I sprinkle a little gunpowder on my breakfast and I think that did the trick Billy." And with that he passed away.
They buried him near the family home and Billy followed his advice. Each morning he would sprinkle a pinch of gunpowder on his cereal and he popped by his Grandpa's grave every week to thank him for his good health. Billy died at the age of 132. He left behind him 2 wives, 6 children, 18 grandchildren and 37 great grandchildren but, most notably, he left the 140 foot crater where the crematorium used to be.
Today's Major Economic Releases
||UK: Manufacturing PMI
||UK: Net lending to individuals
||US: Final manufacturing PMI
||US: ISM manufacturing PMI
||US: Beige book
Daily Currency Insight by David Johnson
Daily Currency Analysis with Zeta Webber
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