Pound and Dollar volatility likely today
|Australian employment change weakens AUD
US cuts base rate
Bank of England meeting today – no change expected
Sterling had another positive day yesterday after more words from the UK and EU sides of the UK independence plans. Also, there is more confidence amongst the Conservatives that the Supreme Court will rule that the proroguing of Parliament was legal after all. Oh dear, Gina Miller, how are you going to get publicity next? The Pound’s gains came in spite of a slight slowdown in consumer inflation.
Today is another important day for UK data. Retail sales and a Bank of England meeting (BoE) are enough to keep us guessing. No change is expected from the BoE, but a little bit of a slowdown in retail spending in August wouldn’t be too much of a surprise. Sterling volatility this morning is highly likely.
Fed is right to tread carefully
As expected, the US Federal Reserve cut 25 basis points off its base interest rate last night. They seem to be trying to arm the US economy for the slowdown the global economy is experiencing without doing too much to excessively accelerate spending. Their base rate is now a variable between 1.75% and 2.00%; far too high, according to the US President. The marked rise in US housing starts and building permits tells the Federal Reserve they are right to tread cautiously, though. Because the move was so widely forecast, the USD barely moved.
Bad news for Australian central bank
Early this morning we had data from Australia showing a rise in the unemployment rate from 5.2 to 5.3% and a move from full time to part time employment amongst those in work. That’s another headache for the Reserve Bank of Australia (RBA) and the GBPAUD exchange rate rose by 1% or so.
Another turbulent time for US Dollar ahead
Whilst this morning’s diary is dominated by the UK events, this afternoon’s is all US in nature. The weekly jobless data, Philadelphia Federal Manufacturing Indices, the US Current Account and existing home sales data are all due. Another bumpy day for the USD is expected – get in touch if you are buying or selling US Dollars.
An unfortunate choice of letters
Oh, and I loved the story of the guy who stormed into a sandwich shop in the US demanding to know who had written bitch on the wrapper of the sandwich his wife had just bought. He calmed down (and blushed presumably) when the manager pointed out that rather than saying bitch, it stood for Bacon Lettuce and Tomato with Cheese – blt ch. Oops!
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