- Sterling boosted as Sajid Javid resigns
- Euro under pressure from poor GDP data
- Happy Valentine’s Day
Does the garage have any flowers left? I am just checking for a friend.
It can’t be good for your ego when your resignation as UK Chancellor of the Exchequer leads to a rally in the Pound but that is what happened to Sajid Javid yesterday. Sterling gained nearly a cent in value against the Euro and was up half a cent against the USD when the hope of more expansive policies accompanies the Chancellor’s exit.
In fact the Prime Minister has created a whole new economic team working between Numbers 10 and 11 Downing Street in an attempt to coordinate policy between the two offices. Sterling has retained those gains overnight but – from a technical perspective, it is testing long term resistance levels.
Sajid Javid’s resignation leads to new opportunities for the risk averse
The level of €1.2040 has capped the Pound since July 2016 and is being tested for the 5th time right now. If the Pound fails to break through, a correction of a couple of cents back to €1.18 is highly likely but a break above €1.2040 ought to herald a significant shift to €1.2450 in time.
The risk averse amongst us with Euros to buy should be taking advantage of this spike but those with more of a risk-taking nature may wish to place orders above this level in the hope of spikes to loftier rate. Obviously the opposite is true for Euro sellers.
GBPEUR rise driven by a drop in German GDP
Sterling strength wasn’t only caused by the resignation of Sajid Javid. This rise in the GBPEUR rate is not just a Sterling story though. German GDP (Gross Domestic Product) stalled in Q4, dropping annual growth to just 0.3%; down from 1.1% in Q3. Yesterday’s German inflation data showed deflation of 0.6% in January.
We get the Eurozone data for Q4 this morning and there are fears the numbers will be pretty poor. Add in the concerns over the Eurozone manufacturing sector and the weakness of the Euro is entirely understandable.
Watch out for US data this afternoon
The afternoon brings a wealth of US data including retail sales, industrial production and both business and consumer sentiment indices. The interesting one is the manufacturing data which may well follow the path of others around the world.
China’s dispute with the US is still hampering manufacturing demand and the Coronavirus can’t help on that. The USD though is holding up well as investors seek the safety of US assets.
And Sky News is reporting a cassette mixtape washing up on shore 25 years later and being reunited with its previous owner. Some of the younger readers will need to ask their parents what a cassette is and a mixtape is like a playlist but way more clumsy and haphazard. Either way, Stella Wedell lost the cassette on holiday in the Costa Brava or Mallorca in 1993 but saw an image of it in Stockholm taken by a UK photographer who found the tape in Fuerteventura in 2017. Well-travelled and still working, amazingly.
At the marriage guidance councillor’s office
Councillor – you wife says you have never bought her flowers. Is that true.
Husband – Crikey. I never knew she sold flowers
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