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November 2017

Sterling slips in spite of positive data

Published: Friday 24 November 2017

  • Sterling slips in spite of positive data
  • Canadian retail sales drop
  • US holiday leaves markets rangebound
By David Johnson
 
 
Sterling steps backwards
 
Sterling took a backward step in spite of strong retail data from the Confederation of British Industry (CBI).  UK Gross Domestic Product (GDP) growth was in line with the first estimate of 1.5% on an annualised basis and that was enough to steady things, but not enough to boost the Pound. Sterling wasn’t helped by a drop in business investment. The obvious cause is nervousness surrounding the Brexit negotiations. Same old, same old, in fact.
 
Euro fails to strengthen on policy meeting minutes
 
Minutes from the last policy meeting of the European Central Bank (ECB) showed broad agreement on the reduction in their bond buying programme. The Euro did strengthen a little on that news, but strong Purchasing Managers Indices (PMI) and a little more security for Angela Merkel were more influential in lifting the beleaguered shared currency.
 
Friday brings the IFO institute’s surveys on business climate and expectations for Germany. The forecasts suggest the numbers will be down and that could weaken the Euro. In a thinly traded market, that reaction is likely to be exaggerated; so automated orders may be your best chance of an exchange rate improvement.
 
Disappointing retail sales for Canada
 
Canada’s retail sales data disappointed. A growth figure of 0.9% was forecast, but the actual was just 0.1%. Even the slightly upwardly revised data for the previous month wasn’t enough to lift the Canadian Dollar. What we saw was CAD strength ahead of the release and a return to previous levels half an hour afterwards.
 
US Dollar treading water during Thanksgiving Holiday
 
The lack of a US market meant late trade on Thursday was tediously light and that is likely to be the case tomorrow, because many traders will take the extra day as holiday. If you have been living in a cave for the last week, you may have missed the fact that the US tradition of massive sales on the day after Thanksgiving has crossed the Atlantic in an Easterly direction.  Infuriatingly, Black Friday has extended into black week, black sevenday and all sorts of other marketing devices to get us all out shopping. I’m stamping my foot and I’m going to hold my breath until I go blue to avoid the shops on Friday. Please could somebody ban Black Friday, along with trick or treating, man buns, fidget spinners and ordering in a restaurant by asking, “Can I get….”. 
 
Breaking news

Thankfully, the rumours about Robert Mugabe entering the jungle in ‘I’m a celebrity, get me out of here’ have proven to be untrue. Imagine trying to vote him out!

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR 09:00 EU: German Ifo Business Climate 116.7 116.6
GBP 09:30 UK: High Street Lending 41.6k 40.9k
USD 14:45 US: Flash Manufacturing Purchasing Managers' Index 54.6 55.1
USD 14:45 US: Flash Services Purchasing Managers' Index 55.2 55.5

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news