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October 2015

Daily Currency Insight

Published: Thursday 15 October 2015

As you are probably aware, the number of people in jobs in the UK hit a record high last month. Obviously, the population is growing so we ought to expect the capacity is there for a record but it is encouraging nonetheless. Average wages are still growing but the pace eased a tad last month. Sterling though, bounced on the news. It has had a bit of a torrid time of late but it would appear enough is enough and the first glimmer of positive data was enough to put the spring back into the Pound's step. It rose in all exchange rates and looks healthy this morning. Sterling is nearly 2 cents above yesterday's low against the Euro and a similar amount against the US Dollar but there is nothing of any significance on the UK data front today, so don't be surprised if the pound treads water.
Late yesterday the US Federal Reserve published the blandly named Beige Book which is an anecdotal round-robin of the views of regional Federal Reserve districts. Modest is the word most often used in the Beige Book but we also got a few 'weaker' and the odd 'subdued' within the text, so the chance that the Fed will start raising interest rates at the end of the month took a backward step in everyone's expectations. I suspect the Fed will keep the base rate at this record low for longer than that. The Dollar is a tad weaker and has lost 3 cents against the  Euro in the last three weeks. 
Overnight news included Australian employment data which was a tad softer than expected at the headline level but the underlying data is still relatively positive. The Australian Dollar which had weakened after Chinese data earlier in the week, rebounded by a cent and a half against the Pound.
All of today's exciting data come from West of the Atlantic. We will get the weekly jobless claims data from America which is expected to be in line with last week's number at around 265,000 and we get the US inflation data which is likely to be around 0.0% give or take 0.1% either way. None of which will inspire sharp US dollar adjustments.
We will also get Canadian home sales data. The Canadian Dollar; like most of the other commodity related currencies, is caught in a relatively narrow range. The Chinese slowdown, poor commodity prices and the mixed nature of US data (America buys 70% of Canada's exports) is hampering the Canadian economy but traders don't appear to be convinced enough to sell the CAD in any volume. So the C$1.98 – C$2.01 range dominates the GBP-CAD exchange rate.
In other news, I know all businesses are after great feedback these days but one package delivered from China kind of takes the biscuit. When Terrence Kuiper ordered a hat for his wife, within the package was a handwritten note adorned with pictures of stars and lightbulbs and a big lipsticky kiss, imploring him to give more than three stars of feedback or the worker would be punished by his/her boss who was; according to the letter, something rude that I can't print here for fear of setting off firewall alarms all over the UK.  And before you say it, No that is not how we managed to get a 5 star rating on Feefo.  
“Rudeness is the weak man’s imitation of strength.”
Edmund Burke