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March 2017

Euro shuffles as data improves

Published: Wednesday 15 March 2017

  • Euro shuffles as data improves but Dutch election causes concern
  • Sterling rebounds ahead of unemployment data
  • USD strong ahead of likely US rate hike
By David Johnson
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Main
Eurozone industrial production bounced back in January and the German ZEW Business Expectations Index for March was also upbeat. All of that was positive for the Euro, but the uncertainty around today’s elections in the Netherlands is holding back any pro-Euro sentiment.  Oddly, it seems the world’s media has gone election-crazy and are far more interested in what happens today for the pro or anti EU sentiment it may unveil. Attempts to make this a proxy Clinton – Trump affair have fallen on deaf ears…thank goodness. The Euro is a tad weaker this morning; back to levels we saw at the end of last week, in fact, and we have inflation data from France and retail sales data from Italy to keep things lively.
 
UK data comes in the form of the unemployment figures. We think the unemployment rate may have slipped to just 4.7% and average wage growth is running well ahead of inflation at 2.5% or thereabouts. That would be good for Sterling and, were it not for the imminent triggering of Article 50, the Pound ought to strengthen. Whether it will is another matter.
 
This afternoon is awash with US Dollar related events. An uplift in inflation is expected, a small dip in retail activity is forecast and there is a chance US interest rates will rise when the Federal Reserve makes its announcement later. The Dollar has strengthened in expectation of that and will slump if the markets are disappointed. That is a distinct possibility because Janet Yellen may well talk about needing further evidence, but volatility just ahead of and just after the announcement is assured. Undoubtedly, automated orders are the most attractive tool in these circumstances.
 
The New Zealand Dollar will be volatile overnight as well. We are expecting a dip in New Zealand’s annual GDP growth and that would be a negative for the Kiwi Dollar. As with the USD, automated orders may well catch spikes in the GBPNZD rate that will unwind before the UK open on Thursday.
 
And scientists have studied the five second rule. You probably use it yourself; apparently 76% of us do. If dropped food is on the ground for less than five seconds it is still edible…so says the rule. And Scientists at Aston University agree – with a raft of caveats. If the floor is dirty – don’t do it and if there is visible dirt on the food – wash it off. So the rule is really just common sense and so are the caveats, then. Phew, at least we know now, eh!
 
Joke
Dad, when I grow up I want to be like Boris Johnson.
Sorry, son. You’ll have to choose one or the other. 


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