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November 2015

Daily Currency Insight

Published: Monday 09 November 2015



So firework 'week' is over in the UK. As a pet owner, I can definitely say, thank goodness for that. I am sure everyone else who spent evenings with a cowering/barking/panicking dog or a petrified cat or a shell-shocked pony would join me is wishing we really did remember we celebrate the gunpowder plot on the 5th of November and not any old day between Halloween and the middle of the month. I am really confused, Homebase were selling fireworks and playing Christmas songs. Help!
 
I have pledged not to fuel the firework thing with puns and today is no exception. Last week was very mixed after the central banks caused a fair amount of confusion. If you look at the data, the Bank of England surely can't think it has a case for interest rate hikes anytime soon but they are still talking about doing so. Sterling is holding up well in spite of serval growth downgrades and the BOE's inflation downgrade. There is so little UK data this week that some of that recovery we saw in the pound on Friday is likely to peter away in the midst of other data releases. We will get unemployment data on Wednesday but the forecasts are for quite limp growth, so if you are a sterling seller, it may be prudent to do so early in the week to avoid the risk of GBP deterioration.
 

GBP/USD

 
There is a lot of hot air wafting around suggesting the Federal Reserve is going to start 'normalising' as they put it, the US interest rates in December. A rate hike, if it comes next month, is likely to be a teeny tiny one; perhaps 0.15%, to test the water and see what the markets make of it. More importantly, whilst they are keen to get back to normality, they are fearful of killing the tentative recovery in the housing, labour and retail sectors. We got very strong labour market data on Friday, will get retail data that is forecast to be positive on Friday. The US Dollar is easing back into a position of strength ahead of any such Federal Reserve announcement. We get a slew of Fed speakers on Thursday; their every utterance will be dissected by hint-greedy analysts.
 

USD

 

GBP/AUD


The week also brings Australian employment data, Eurozone growth data and a smattering of Eurozone inflation reports, but all of these other reports will be overshadowed by Chinese inflation, retail sales and industrial production data. The commodity markets of the world are desperate to see China start to simmer again after a significant cooling off period over the last year. No one wants it to overheat again but a simmer would be absolutely spiffing, thank you very much. The forecasts for this week's Chinese data would suggest we are getting to the Goldilocks stage, not too cold and not too hot; in fact just right. 

 
AUD

 

GBP/NZD


If the Chinese data is a little less scary and a little more 'simmer', the Aussie, Kiwi and Canadian Dollars will take heart and strengthen a tad and the South African Rand might do likewise. We shall see.


NZD


GBP/CAD

 CAD


And I have been asked this morning whether I was the David Johnson who paid another driver's £78 petrol bill in Richmond at the weekend. I am sorry to say I wasn't but I am glad another David Johnson is doing a good job with our name. Good work Sir.

Memories

 Three elderly ladies are meeting for a tea morning. As they sip their tea one of them says, "You know my memory is failing me. I often get to the top of the stairs and wonder why I went up there."
 
The second lady says, "I was sitting on the edge of my bed the other day and I couldn't remember whether I was going to bed or getting up!"
 
The third lady says, "I feel so sorry for you. Thankfully my memory is as good as it has ever been," and then added with a smile, "touch wood." With that she knocked her knuckles twice on the table beside her and then said, "Excuse me for a minute. I think there's someone at the door."