- Aussie Dollar spikes after upbeat Reserve Bank of Australia minutes
- Euro stronger on inflation numbers
- UK inflation awaited
By David Johnson
A rise in the June Eurozone inflation figures saw the Euro regain some strength through Monday. The GBP-EUR rate dropped back from the high 1.14s to mid 1.13s again and the Euro - US Dollar rate pushed up above $1.15 for the first time since May. There is a lot of USD buying interest in this area though, so there will need to be something more than a short term inflation blip to push the Euro higher. This morning’s ZEW Economic Sentiment Index for the Eurozone could well be enough to give the Euro another blip. So Euro buyers beware.
Part of the US Dollar’s weakness stems from the US President’s inability to pass laws. The repeal of Obamacare appears to have failed and that is the second big election promise Donald Trump has been unable to keep, despite having majorities in both the senate and Congress. If you can’t convince your supporters, you have a problem….Bigly.
For its part, Sterling offers mixed signals. Back down to Friday’s levels against the Euro, but up to its highest against the US Dollar in 10 months, with an eye on $1.32 from a technical perspective. UK inflation figures are due for release at 09:30 GMT and that could push Sterling back up the pole if we see 3.0% on the year as some are forecasting. We are also likely to see comments from comments from Bank of England (BoE) Governor, Mark Carney, this afternoon.
Overnight news included inflation data from New Zealand and that was well below expectations at 1.7%. The markets had envisaged a 1.9-2.0% figure. The NZ Dollar weakened on the news, as it downplays any hints of interest rate hikes from the Reserve Bank of New Zealand (RBNZ).
We also saw the minutes from the last Reserve Bank of Australia (RBA) meeting. The upbeat nature of the meeting surprised trades and the Australian Dollar strengthened against all comers on the news. The Sterling – Australian Dollar rate fell 2.5 cents and is now down to levels we haven’t seen since April. There should be support for the Pound around A$ 1.65 but, if that fails, A$ 1.6150 offers trend line support for the Pound.
And taxi drivers in Stafford are hot under the collar after council bosses handed down a new dress code. Only two buttons of their shirts can be undone, logo T shirts are banned and flip flops shall not be worn. I can’t see anything in the regulations that deals with political views or football opinions, more’s the pity…
A Texan, while visiting England, found himself in the back seat of a taxi on the way from Windsor to his hotel in London.
Passing by Windsor Castle, the Texan asked the cab driver “What’s that building there?” “That’s the castle; Windsor Castle” replied the cabbie. “Cool. How long did it take to build that?” asked the Texan. “About 16 years, apparently” replied the cabbie. “16 years? We build ’em twice as high, twice as wide and four times as long down in Texas, and we do that in six months.”
A while later, the cab driver makes his way past the Natural History Museum. “What’s that building over there?” asked the Texan. “That’s the Natural History Museum,” replied the cabbie. “A museum? How long did it take to build that?” asked the Texan. “About seven years,” replied the cabbie. “Seven years? We build ’em twice as high, three times as long and four times as wide as that down in Texas, and it only takes us about two months.”
Shortly thereafter, the cabbie drives past the Shard; all 306 meters of it. “What’s that building there?” asks the Texan, pointing at the shiny glass tower. “Blowed if I know,” replied the cabbie, “It wasn’t there when I left this morning.”