Cable Falls Due To Disappointing Macro Data
The decline in market sentiment has coincided with some support for the yen. In level terms, the weaker tone to sterling saw cable (GBP/USD) fall from its opening up near $1.55, down through $1.54. It opens this morning around $1.534. The EUR/GBP pair moved higher, trading back up around the mid 72p mark. EUR/USD spent most of the day edging lower in the $1.11-1.12 range.
UK economy
There was some downward pressure on sterling. Disappointing UK macro data (public finances for August and CBI orders for September) acted as a headwind to the currency. The disappointing macro data has meant that the Pound sterling trades at $1.5321 and €1.37597.
EU economy
Today the focus is on the Eurozone, where we get the key data release of the week, namely the September PMIs. They are expected to indicate that the economy maintained its modest pace of growth as Q3 drew to a close.
Of more interest though, may be the testimony by ECB President Draghi to the EU Parliament. Last week’s cautious remarks from the Fed have shifted focus back to ECB monetary policy and the potential for further easing.
Euro area manufacturing and services slide during September. However the third quarter average still stood at highest level in over four years. Read more
The Euro buys $1.11216 which is the lowest level in over a month. The Euro will buy £0.72611.
Contrasting view for US Dollar
Amundi asset management which oversee and mange $1 trillion believe that the Dollar is overvalued. The dollar is unlikely to extend gains unless the Federal Reserve raises interest rates more than once.
Amundi specific more than once because they believe that the first rate rise has already been factored into the level the dollar is at gainst the euro and yen. Amundi asset management view contrasts with Goldman Sachs which believe that the dollar could gain as much as ten cents against the euro. In total Goldman Sachs expects the Dollar to trade at €1.07 and 130 Yen. Read more
This morning the Dollar buys €0.89909 and £0.65279 which is the highest since 15th of September.
Australian Economy
Australian house prices are rocketing at the moment, namely rising by 9.8% for the third quarter compared to last year. In the first quarter of 2015, house prices rose by 1.6% from the previous quarter. Banking regulators have issued legislation to reduce lending to property investors as worries about the economies exposure to property and the banking sectors exposure to property related debt increase. Read more
Australia’s new Prime Minister, Malcolm Turnball has issued new initiative to re-energise the Australia economy. He envisions Australia embracing innovation and technology instead of relying on traditional sectors such as mining.
Malcolm Turnball is highly regarded by the entrepreneurial environment within Australia as he is frequently seen utilising his Apple watch or tablet within parliamentary session. This is in contrast to Tony Abbott who resigned last week through fax. Read more
This morning the Australian dollar buys $0.70467 USD and $1.12277 NZD.
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