Sterling slips after short spike
Brexit uncertainty continues, as ongoing discussions and negotiations appear to be going round in circles once more (Gladstone @TreasuryMog said it all on Twitter
this week…) This has knocked the Pound down a bit, but Sterling is attempting to hold its own after positive economic data in the form of surprise improvement in both the manufacturing and construction sectors and a general air of resilience in the face of continued uncertainty.
Ups and downs for the Euro
It’s been a mixed bag for the Euro this week, too. The single currency took a hit from a noticeable fall in retail sales, which essentially put paid to the upwards run the Euro was on. All was not lost, however, as very positive Eurozone-wide Purchasing Managers’ Indices (PMI) data settled things down for the Euro.
Australian Dollar stands firm
The Australian Dollar strengthened this week thanks to rising retail sales and a more robust policy update from the Reserve Bank of Australia (RBA), who kept interest rates the same once again. Impressive Purchasing Managers’ Indices (PMI) results from China, Australia’s key export partner, also helped improve the AUD’s fortunes. This activity all helped when surprisingly disappointing economic growth data emerged for Australia – pointing to the poorest growth performance for twelve years – and the Australian Dollar held fast. In contrast, business profits and investment figures have increased, so this counteracted any dramatic drop for the AUD.
US Dollar gets a helping hand from falling oil prices
The US Dollar, having starting the week strong and then weakened on geopolitical concerns, strengthened again somewhat as US inventories went up and oil prices fell; usually a sure fire way of boosting the USD. Earlier in the week, US economic data had been largely positive, as manufacturing output and new orders improved throughout November and helped the US Dollar up. The US Senate’s approval of the new tax legislation has also been the source of some uncertainty, with positive business sentiment in response to breaks for big business and potentially negative implications for US individuals on a lower wage.
Canadian economy ticking along nicely
Near neighbours in Canada seem to be enjoying economic stability, so although we are not expecting another interest rate change from the Bank of Canada (BoC) – although they are no stranger to surprise interest rate announcements – there are likely to be hints at interest rate increases in the announcement from Canada’s central bank, and this is serving to buoy the Canadian Dollar against the Pound.
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