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November

A political week makes markets nervous but Sterling still stronger

Published: Thursday 08 November 2018

  • US Dollar dips on Democrats’ Mid-Term result
  • Rumours of Brexit deal boost GBP
  • Euro is one to watch… could it be next to fall?
  • Australian and New Zealand Dollars could be affected by Chinese data 
The US Mid-terms caused quite a stir, with the Democrats taking control of the House of Representatives. While the Republicans kept the Senate, a Democratic House could pose a significant challenge to Trump and his policies. This development has also weakened the US Dollar against all its major currency pairings, and with little US data of note being released right now, the USD is vulnerable against its rising currency counterparts elsewhere.

US-China trade wars are also affecting global currencies – the US Dollar included. Increasing uncertainty is making world markets nervous, with stock sell-offs and risk revisions from tentative traders. The focus now turns to the US-China meeting in Washington on 9th November.

Meanwhile, the US has announced its decision to reintroduce sanctions on Iran, potentially sending ripple effects across the oil industry and oil companies across the globe. Combined with Brexit and the Italy situation, this also puts further pressure on the EU.
 
United States Capitol Building - Halo Financial

Rumours of Brexit deal boost GBP

New hints that an end is in sight for the Brexit deal negotiations are surfacing every day, and each helps the Pound along a little. The US Dollar weakening on the latest political events is an added bonus for the British Pound. Brexit speculation, rather than economic data, is driving the markets, although recent UK data has been a somewhat mixed bag, with the service and manufacturing sector growth sliding, according to recent reports, and the latest housing data looking sketchy. The Pound is currently over 1.3100 against the US Dollar, as markets cling to the hope that a Brexit deal is just around the corner. The markets watch and wait once more…

Euro is one to watch… could it be next to fall?

The Eurozone has a great deal to contend with, too, and the Euro is coming under pressure from a number of geopolitical developments. There is potential for the Pound to climb against the Euro if Brexit deal rumours are to be believed, and there is still the Italian conundrum and the question of Germany’s future leadership. If you are planning to sell Euros, you may wish to do so before any further strengthening of Sterling against the Single Currency. 

Elsewhere in Europe, the Swiss Franc is also under pressure, as the country’s retail sales figures took a tumble.
 
Watch out for the Australasian currencies… hanging on Chinese data 

The Australasian currencies await China’s latest trade data with trepidation – the forecast is for a big drop in exports, which could affect Australian and New Zealand economies. It could, however, provide an opportunity for those who are planning to sell Australian or New Zealand Dollars, so it is definitely one to watch.

The ongoing US-China trade war concerns are also making the markets volatile, so these currencies are particularly vulnerable in the current market. This is an opportunity to make the most of the volatile markets and use automated orders to target NZD/AUD exchange rates – get in touch if you’re planning any AUD or NZD payments.

Meanwhile, the New Zealand Dollar soared to the highest for four months following the latest interest rate decision from the Reserve Bank of New Zealand (RBNZ), leaving the rate unchanged at 1.75%, and a weaker US Dollar also helped provide a boost for the NZ currency. However, the RBNZ Governor made it clear that a cut in interest rates could be on the cards for future decisions, owing to inflation falling short of targets and concerns about disappointing GDP forecasts. This prevented the New Zealand Dollar from strengthening further.

#ThursdayThoughts

We’d like to give a big shout out to some of our Halo team members after great Feefo reviews this week:
 
***** Slick efficient service
Charlie is always easy to get in touch with & responds in a timely manner which is very important as we are communicating with a large time difference. Funds are transferred super quickly and confirmation of transaction communicated fast.
 
***** Halo consistently goes above and beyond
Halo Financial is a fantastic business to work with. My point of contact was Joe and he made great efforts to help me through the process of transferring my money to Germany. Joe, Ria and Stella (in the funding department) worked in tandem to make sure the process was seamless, while answering all my questions. I would highly recommend anyone moving money from one country to another to use Halo as their intermediary. Thanks so much. I look forward to our next transaction.