Data Releases Overlooked As Markets Awaits Central Banks
As expected, last week proved to be fairly subdued from Forex point of view. With markets focused on expected Federal Reserve and European Central Bank policy changes in December, the busy schedule of data releases was generally overlooked. As a result, the main currency pairs spent the week within relatively narrow ranges, which meant the euro remained pinned down against the dollar and sterling.
In the week ahead, we get the first of the key central bank meetings in December, with the ECB policy decision due on Thursday afternoon. The still very weak nature of Eurozone inflation and the highly dovish tone of the ECB at its last meeting, including the promise to “re-examine the degree of monetary policy accommodation” this week, has left markets in little doubt that we will see further policy easing announced.
The euro could lose further ground if these measures prove aggressive. The levels of $1.05-1.06 against the dollar and 70p versus pound sterling are major supports for the single currency. If these were to give way, it would signal the start of a further down-leg for the euro. Overall then, the euro is likely to continue to struggle ahead of the meeting.
For the dollar, US non-farm payrolls data for November will be closely followed. A very strong increase in October (+271k) all but confirmed for markets that the Fed would begin hiking rates at its December meeting (15th-16th). Thus, the strong 200k increase anticipated this week will probably do little to alter expectations. Nonetheless, the dollar could still benefit as a result. Sterling-wise, it is a light week in the UK. November PMIs are the only release of note. Thus, any moves in EUR/GBP or GBP/USD will likely come from the non-sterling side of the respective pairs.
BoE’s FPC highlight pockets of concern
The Bank of England’s Financial Policy Committee are expected to outline their areas of concern today. It is expected that the FPC may raise countercyclical capital buffer which is the amount of cash a bank must hold to protect against a collapse in asset prices affecting a banks balance sheet. This would be in line with attempting to slow down unsecured loans which a mainly funding the massive expansion in lending for buy to let mortgages. Read more
Confidence across the board for New Zealand
Business confidence has reached a six month high for New Zealand, signalling more people believe in a strong twelve months ahead. This coincides with 13.5% expecting to hire more people and 14.6% expecting to make investment within their company. Additionally, 14.9% expect rising profitability, which is a rise from 12.75 last month. Find out more figures
Britain marked 11th consecutive quarter of growth
Britain on Friday posted economic growth of 0.5% for the third quarter, down 0.7% experienced in the second quarter. A significant trade gap of £14.4 billion is the reason why the economy slowed in the third quarter. A trade gap is the difference between imports and exports.
Two biggest risers for the third quarter was investment at 2.2% and the services sector at 0.75. Staggeringly, the services sector now accounts for 75% of the British economy.
An insight from our CFO, Sinead Fitzmaurice
Sinead Fitsmaurice, opens up about her early 20’s and knowing where you want to be in the future. She firmly believes that ‘do it better’ attitude has helped her grow into the leader she is today at TransferMate.
TransferMate new service;
In the meantime: we would like to announce a new receivables service where we can collect money for you at better exchange rates and cutting out receiver/sender fees. TransferMate are one of three foreign exchange companies offering this service and have invested €15 million in this venture.