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October 2017

Weekly Currency Insights from Halo Financial

Published: Monday 30 October 2017

What you may have missed – and what to watch out for this week…
  • Trouble for the Euro as USD enjoys boost
  • Who will be the next Federal Reserve Chair?
  • Sterling strengthens on better than anticipated data
  • Politics cause problems for Australian Dollar
By Rachael Kinsella

Trouble for the Euro as USD enjoys boost

The big news from last week was Catalonia voting to declare independence from Spain, with a vote of 70-10. This would mean transferring power from Spain to Catalonia, and all that entails. As Spain makes moves to take control of Catalonia, the tension and strength of feeling we have already seen in the form of violence and protests is a major concern for Europe; and the situation still poses political, legal and economic concerns for both Europe and the Euro.

With this announcement coming very soon after the US announced their strong GDP growth of 3%, boosted by consumer spending, business investment and exports, the Euro fell against its major currency partner, the US Dollar, having already dropped against the USD on the European Central Bank’s (ECB) announcement that they were leaving interest unchanged. Read more about the US Dollar’s performance in the latest USD report.

The ECB also announced that they will start to taper their Quantitative Easing (QE) programme from €60 billion to €30 billion in January 2018, ostensibly for six months, but essentially for as long as it takes. This didn’t have quite as much impact on the Euro as we initially thought, although it did start a downward move against the US Dollar that is continuing as the US Dollar strengthens.

Who will be the next Federal Reserve Chair?

And bets are on for who will be the next chairperson of the US Federal Reserve. Recent news suggests that Janet Yellen is out of the race, leaving two remaining candidates with very different attitudes and approaches. Find out more in our latest commentary.
Sterling strengthens on better than anticipated data

The Q3 GDP results for the UK were surprisingly healthy, given all the recent doom and gloom in the news, and the Pound strengthened accordingly. The UK economy grew 0.4% July- September 2017, better than the expected 0.3%. This has provided a boost to the Pound and may be enough to prompt the Bank of England (BoE) to raise interest rates at their eagerly anticipated meeting on Thursday 2nd November, but this is certainly up for debate upon analysis of all the figures. The BoE has quite a week ahead of them – and markets could have, too. Watch this space…

Politics cause problems for Australian Dollar

The Australian Deputy Prime Minister has been disallowed, owing to joint New Zealand citizenship. This is not helping the Aussie Dollar, which is floundering against a strong US Dollar and in a rare occurrence for the usually strong AUD, weakening against the Pound.

#MondayMotivation from Heraclitus, Ancient Greek philosopher

“Day by day, what you choose, what you think and what you do is who you become.”

“Everything flows and nothing abides, everything gives way and nothing stays fixed."

“No man ever steps in the same river twice, for it’s not the same river and he’s not the same man.