- Currency market volatility is back, baby!
- Pound climbs against US Dollar
We apologise for the gremlins in today’s Daily Currency Insights – we’re having some technical issues but still wanted to get your news to you today. If you are having any difficulties reading today’s bulletin, please let us know.
Currency market volatility is back, baby!
Asian markets were in risk aversion mode after more US-China worries set the US Dollar moving downwards overnight. Trade talks between the US and China seemed to be moving backwards instead of forwards, as the anticipated trade tariff roll backs seem to move farther into the distance. The uncertainty over the ongoing trade wars and dashed hopes of reaching a conclusion have driven volatility in the currency markets, as investors are moving to the traditional “safe haven” currencies and Gold. From the US perspective, it seems like the trade talks can wait. The markets, however, aren’t so sure.
Make sure you keep on top of the market movements and what they could mean for your international transfers this week and in the weeks to come.
Pound climbs against US Dollar
The Pound has risen against the US Dollar, capitalising on the Dollar’s dip and also boosted by further indications of a Conservative lead in the general election polls. This seems to be due to the markets’ dislike of uncertainty and a Conservative victory being seen as a more “known unknown” in the current UK political situation. The uncertainty around Brexit is one of the main issues affecting the UK economy, as businesses hold back on big decisions and investment and the UK’s industry continues to feel the effects on productivity and trade, exports and imports.
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Disappointing UK data doesn’t dent Sterling
Today’s Service Sector Purchasing Managers’ Index (PMI) brought more disappointing economic news for the UK, following the declining manufacturing sector results earlier this week. The latest report showed a marginal drop in activity for the UK’s service sector, but Sterling seems to be weathering the storm. The continued uncertainty of Brexit and UK politics will drive the direction of the Pound in the weeks ahead – be prepared for more volatility on its way in the run up to the general election on 12th December.
Get in touch if we can help with any Sterling transfers you need to make now and after the election – it’s going to get hectic!
China economic data good news for Asia Pacific markets
Chinese service sector data was very positive for November, offering a boost to Asia pacific trade economies. The China Caixin Services PMI was at 53.5 in November, an increase from 51.1, smashing expectations and the highest rate for nearly two years. Manufacturing and service providers are both seeing strong increases in output and price pressures are still low.
Australia Gross Domestic Product up thanks to stimulus measures
Australian Gross Domestic Product (GDP) grew 0.4% in quarter three of 2019; below the growth seem in the previous quarter (0.6%) and coming in under expectations of 0.5%. The economy saw overall growth of 1.7%. While the Australian economy has benefitted a little from monetary stimulus, the effects have been limited, and there are still a few concerns to iron out. Overall, the Reserve Bank of Australia (RBA) thinks the economy is “slowly turning the corner”.
Australia’s latest Services Index also showed a drop from 54.2 to 53.7 for November, as it also deals with international trade concerns.
Bank of Canada likely to maintain current rates
Canadian This afternoon, the Canadian central bank will be in the spotlight as they announce their latest interest rate decision. This is expected to remain unchanged, as the current monetary policy seems to be working for the Canadian economy, which is broadly in good shape. But the Bank of Canada (BoC), like all central banks in the current climate, has raised concerns about trade uncertainty.