- Australian Dollar buffeted by global risk fears
- US Dollar jumps on jobs data
- Euro disappointed by data
- Pound in pause mode awaiting Brexit talks
By the Halo Financial Team
Welcome to your first Weekly Currency Update of 2019. I do hope you had a good festive break and are looking forward to a successful 2019, whatever it holds. As expected, the currency markets began trading with a bang! We had a flash market crash at the turn of the year… but what does that actually mean? Well, concerns about the Chinese economy and for the multiple economies that have close export-import relationships with China spooked the markets and so investors flocked to safe haven currencies in a knee-jerk reaction, which calmed and corrected somewhat as political events and economic data started up again after the festive break. The Japanese Yen, as a relative safe haven currency, got a considerable boost, as disappointing data was also revealed for Europe and across Asia Pacific markets.
Australian Dollar buffeted by global risk fears
All this has had a pronounced effect on the Australian Dollar
, which relies heavily on China for both exporting and importing, and also has close trading ties with the USA, still at loggerheads with China over trade tariffs. News that China and the US have further talks planned is a little more reassuring for the markets, as investors watch and wait for the next developments to unfold.
US Dollar jumps on jobs data
The US Dollar
has also received a lift from strong economic data released on 4th
January, after taking a nosedive at the start of the year. The US economy has grown better than expected, but, in spite of a sharp rise in new hirings, the unemployment rate rose by more than the forecast. The Federal Reserve’s Jerome Powell spoke cautiously this afternoon, knocking both investors’ and the US Dollar’s confidence and allowing the Euro to strengthen against its US counterpart. While he reiterated wage growth and a strong jobs market, his mention of concerns about various global downside risks and the implications of the China situation (or should that be situations?) gave the speech a nervous tone overall, setting a scene of challenge for market participants and sending stocks and the Dollar downwards.
Euro disappointed by data
Meanwhile, the Euro
hasn’t dropped as much as it could have, following disappointing data across the board. Ongoing budget tensions, this time with France, haven’t dimmed the Euro, but more lacklustre economic results from Germany chipped away at the strength of the Single Currency, along with some of the poorest composite index results in four years.
Pound in pause mode awaiting Brexit talks
The Pound is still trapped against its key currency partners by Brexit
uncertainty. As the UK waits for further Brexit talks, UK economic data – good or bad – is not having much of an effect on the fortunes of Sterling. Manufacturing
results were strong, Construction cautiously optimistic, but slow, and the Service Sector, which is a huge part of UK Gross Domestic Product (GDP) generally disappointing and less confident than before. But Brexit will be the main driver of the Pound in the days, weeks and months ahead.
We’re delighted to get some New Year motivational messages from our great clients on Feefo, to start the year off the right way:
"Would recommend Halo to anyone needing to use a money transfer service."
Fast and efficient service, prompt response to queries. All dealt with in a professional manner.
"Excellent as ever, recommended."