The Pound keeps rallying!
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Sterling hits two-month high against US Dollar as possibility of Article 50 extension grows
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USD declines on negative data and European Central Bank decisions
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New Zealand Dollar also dips on negative data
Sterling has continued to rise to a two-month high versus the US Dollar amidst the hope that Prime Minister Boris Johnson will eventually ask the EU to extend Article 50 again despite his assertion that he would rather die in a ditch than do so. Mr Johnson has recently changed his emphasis and it would now seem that he is determined to reach a deal with the EU before 19th October. It would seem that the EU is willing to offer an extension which would postpone the UK’s exit from the EU.
USD declines on negative data and European Central Bank decisions
The US Dollar has broadly declined as investors interpreted a batch of economic data releases and the European Central Bank (ECB) rate cut and Quantitative Easing (QE) extension yesterday. The ECB cut the deposit rate by 10 basis points to -0.5% and unveiled a huge bond buying program in an effort to stimulate the European economy. Optimism amongst traders has also seen a retreat from safe haven flows as it has been reported that president Trump may be willing to consider an interim trade deal with China. This would be a massive change in position and would be a welcome sign of compromise perhaps leading to a break in the trade war deadlock.
NZ Dollar also dips on negative data
The New Zealand Dollar weakened overnight despite slightly better than expected manufacturing data. The NZ manufacturing index rose to 48.4, however, the sub index of new orders fell to 45.6 which is the lowest in a decade and the production and employment components also fell into contraction territory. It’s clear that there has been a softening in demand and the Kiwi has suffered as a result.
Today’s economic releases
Today we await a raft of US economic data, including retail sales, export prices and consumer sentiment.
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