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May 2017

Sterling slips as Euro advances

Published: Tuesday 23 May 2017

  • Sterling slips as Euro advances
  • Euro is too weak, says Merkel
By David Johnson
What kind of grotesque insanity or perversion makes someone murder children having a fun night out? Do these people think that, by killing innocents and upsetting their parents, somehow the world will be scared into converting to their ideology? That is the definition of insanity. We all grieve for the families and friends of those who were murdered last night in Manchester and for those who will be physically and emotionally marked for life. Our hearts go out to you.
It seems kind of callous to talk about the financial markets after such a dramatic and tragic event but, carry on we must. The Manchester news ended a relatively peaceful day in financial markets. We did see some strength in the Euro after the German Chancellor told the world that the shared currency was too weak. That’s an odd comment from a country that has benefitted immensely from the weakness of the Euro for its exporters but I am sure Mrs Merkel has a motive.  The Euro–US Dollar rate is up to $1.12; a level we haven’t seen since last September. That is partly to do with the Euro’s strength and partly about the USD weakness that has been a feature of the greenback for a few months now.
Sterling slipped against the recovering Euro yesterday in a UK data vacuum. Today does offer up some UK data in the form of government borrowing figures and the retail sector report from the CBI.  As I am running late, we have already seen improved German business sentiment but mixed data from the Eurozone. That hasn’t moved the GBP-EUR rate much at this stage.
Later we will get speeches from a selection box of Federal Reserve members and we will get new Home Sales figures for the US. These are expected to be rather negative and that will just add to the pressure on the USD.
Overnight tonight, we will get the New Zealand trade data. We are expecting a small surplus but not as strong as last month’s NZ$332 million. Anything in the plus column will be positive for the NZ Dollar though.
Other than these few morsels, the market is quite quiet. On a lighter note though, a man in Texas, Brandon Vezmar, took his date to see Guardians of the Galaxy 2 and was upset when she spent most of the time texting and reading messages in the cinema. He asked her to stop and when she refused, he asked her to do it outside. She went outside and never came back. So he sued her for the $17.31 he paid for her ticket. He won. Maybe it was the film choice, maybe it was him or maybe it was her but I don’t think any of us need to buy a hat for the nuptials.


“Sometimes the Bible in the hand of one man is worse than a whisky bottle in the hand of (another)... There are just some kind of men who - who're so busy worrying about the next world they've never learned to live in this one, and you can look down the street and see the results.” Harper Lee
To Kill a Mockingbird
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