Disclaimer: this material is not investment research as defined by the Financial Conduct Authority
GBP - Sterling is slightly boosted following positive manufacturing figures yesterday
EUR- Services figures have been released above expectations this morning, initially strengthening the Euro
USD- The Dollar remains strong, following yesterday’s strong manufacturing figures
FairFX View: The US dollar remains on the front foot and with at least two further interest rate increases anticipated in 2017, it could well move higher this year. Yesterday’s manufacturing figures supported this.
With a triggering of Article 50 looming, it is possible that the pound could suffer further losses going forward despite positive manufacturing data yesterday.
There was a relatively quiet start to the New Year yesterday, with relatively muted market movement. Overnight Chinese manufacturing data came in above expectations, and this was followed by positive manufacturing data from the UK which bolstered the Pound yesterday morning.
In the afternoon, the Global Dairy Trade Index showed that dairy prices fell by 3.9%, weakening the New Zealand Dollar slightly. In the afternoon manufacturing figures were released from the US. These came in above expectations as well, strengthening the Dollar as interest rate rises this year appear to still be on the cards.
EUR - Services figures are being released this morning from Europe, with the overall figure coming in above expectations – strengthening the Euro slightly. This is followed by CPI figures which are then being released at 10 o’clock. Following Germany’s strong CPI figures recently, CPI is expected to improve in Europe to 1%. This could strengthen the Euro if this comes in line with expectations.
GBP - This morning construction PMI is being released from the UK, and is expected to show a slight slowdown of growth in the sector. However, like manufacturing this could come in above expectations and strengthen Sterling initially.
USD - The FOMC meeting minutes are being released this evening, and this will provide an insight in to the Fed’s decision to increase interest rates.
Wednesday 04 January 2017, 10:10am
USD- All movements will be dominated by the US election.
GBP- Industrial and Manufacturing production results released early this morning.
EUR- Will be affected by external movements from the US election.
Yesterday was quiet on the data front which did little to distract markets from the US elections. Eurozone Retail Sales disappointed and were largely dragged down by poor figures from Germany. However, Investor confidence on the continent did improve slightly.
Overnight, trade balance figures for China improved but were lower than expected. The level of imports and exports were both lower, a further sign that China’s economy is changing in nature. Earlier this morning, Germany’s Industrial Production data missed expectations once again, declining drastically into negative territory.
Movements in the currency markets were volatile yesterday with no clear direction but the pound has improved overnight and through the early morning.
The US election reaching its climax will be the key focus for today and the rest of the week. Movements today will be dominated by exit polls and early results announcements from States.
Current consensus indicates that a Trump victory will considerably weaken the US dollar against the world’s largest economies, however, the greenback could rebound slightly as money flows into safe haven currencies. As a result, other safe haven currencies will be significantly affected. The Swiss National Bank have confirmed they are ready to intervene to prevent the franc strengthening to excess. It is also highly likely that the Mexican peso and Canadian dollar could weaken by up to 20%, due to their exposure to Trump’s policies.
The UK’s Industrial and Manufacturing figures are expected to improve slightly this morning and could add to sterling strength, if this occurs. Inflation report hearings begin shortly afterwards and GDP estimates are released. Any improvement on the previous reading is likely to help the pound.
The Japanese Yen has weakened off and the safe haven is in less demand with Clinton ahead in the majority of polls. If Clinton takes victory, the dollar could gain against sterling and the euro but the overall movement is predicted to be smaller and short lived.
Tuesday 08 November 2016, 09:46am
GBP – The jobs related data out yesterday for the UK came in mixed. This will put the focus for the pound on the Bank of England’s interest rate decision out today.
USD – Crude oil inventories hardly had an effect yesterday, however all eyes will be on data to be released this afternoon in the US, relating to inflation and unemployment.
EUR – Inflation data and trade balance figures are to be released today for the euro area, however this will likely be overshadowed by releases from the UK and US.
Yesterday we saw a mixed bag of employment related data released for the UK. Average earnings was higher than expected, however claimant count came in worse than predicted. The pound continued to lose ground again throughout the day, with the Sterling to euro and US dollar rates hovering around 2 week lows.
French inflation data came out in early hours of trading, and were in line with expectation and hence had a minimal effect on the value of the euro.
Crude oil inventories were released in the afternoon for the US, which although it is not directly related to the US economy, it does often move the dollar as it is the currency that oil is traded in.
Today is a very important day for the UK, being the so-called ‘Super Thursday’. The Bank of England release their official interest rate decision at midday. Members are expected to vote in one fashion, all being for keeping interest rates the same, but the statement given afterwards by Mark Carney could give the market an indication of what lies ahead for the BoE.
We also have retail sales out in the morning, but unless this is drastically out of line with what the market expects, it may not cause any big movements.
The US also have some key information to be released in the afternoon with Retail sales, Phili Fed Manufacturing index, Unemployment data and PPI data coming out. With the Fed’s interest rate statement out next week, all eyes may be on these figures to possibly gauge the US’s current economic conditions.
The Fed’s focus has been mainly on jobs data with relation to interest rate changes, so the unemployment rate figure could be key to their decision next week.
In early hours of the morning the Swiss National Bank decided to keep their interest rates at -0.75%, which was as the market predicted and hence caused no real movements in the Swiss Franc.
Thursday 15 September 2016, 10:12am
Head Of FX & Dealing
Call us on 020 7778 9350