- Activity in Asia Pacific worth noting
- Sterling steady on jobs and wages data, weaker against all the Dollars…
- More disappointment for the Euro
- US Dollar still strong
Slowly and surely…
Last week started slowly, with little movement in the currency markets and not a lot to write home about. This week started at an equally laid back pace, as countries across Europe enjoyed their Bank Holiday.
Activity in Asia Pacific worth noting
The only noticeable change at the start of the week was the Australian Dollar dropping against the British Pound following a more tentative approach to monetary policy than we have seen recently, with no sign of an interest rate raise any time in the near future.
Chinese economic results that came in below expectations also served to weaken the Australia Dollar and fellow raw material producers that trade heavily with China. China’s disappointing data echoes muted results across the global economy.
Australian consumer confidence has remained static as consumers Down Under feel the pinch of housing and energy prices, alongside a lack of real wage growth.
Employment grew in Australia and the latest figures were above forecast, but this did very little to move the Australian Dollar.
The Japanese Yen has fallen after a double whammy of continuing monetary policy decisions and a shock growth result, showing a drop in growth for the first time in four years.
Sterling steady on jobs and wages data, weaker against all the Dollars…
Employment and wage growth were in the spotlight for Sterling, too. Unemployment in the UK is still at record lows, but overall wage growth in the UK is just under expectations of 2.7%, at 2.6%. Real wage growth is up 2.9%, however, which helped keep Sterling steady after a nervous opening to the markets.
The Pound peaked at around 1.3580 towards the end of the week on the news that a customs union agreement had been reached as part of the Brexit negotiations. This was later denied, knocking the Pound back down again.
Sterling is stronger against the Euro right now, but weaker against its other key currency partners, including the Australian and New Zealand Dollars, the Canadian and US Dollars. The rate against the US Dollar has dropped to the lowest since the start of this year. We may yet see Sterling slip further…
More disappointment for the Euro
German economic results were lacklustre and overall Eurozone Industrial Production, which was predicted to show improvement, also came in below expectations. Alongside concerns about the new Italian coalition government and what it means for Italy’s relationship with the EU, these all weighed on the Euro.
Further contradictory data for the Eurozone has kept the Euro under pressure: construction sector results and the latest trade balance figures failed to fuel the single currency.
US Dollar still strong
The US Dollar remains strong, despite a mixed back of economic data, policymaker and political rhetoric. The Dollar managed to dodge disappointing retail sales results and a move away from trade war fears served to bump up the USD.
Canadian Dollar strengthening
The Canadian Dollar is also a grateful recipient of strength from the US Dollar and the rising prices of raw materials. Economic data for Canada has also shown genuine improvement recently, with better than expected retail sales and inflation figures in line with forecasts.
Everyone’s still talking about the royal wedding, but I defy anyone not to smile at the enthusiastic and hopeful address by the Reverend Michael Curry. What a legend!