US government agrees a short term budget
|Today's Highlights
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Sterling recovers
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US government agrees a short term budget
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UK government borrowing data awaited
Current Market Overview
Could it be the coffin for crypto currencies?
Every few days there is another nail being hammered into the coffin of crypto-currencies. The latest is that South Korea is clamping down on anonymous banking as a means to trade in these volatile electronic currencies. Central banks and treasuries don’t like them because they are an anonymous way of shuffling funds around and that is manna from heaven for money launderers. The average price of crypto-currencies has fallen 18% in the last three days.
US government compromise doesn’t help US Dollar
As I suggested yesterday, the US government reaching a compromise to stop the shutdown and keep the civil service in business until 8th February wasn’t enough to strengthen the US Dollar. In fact the Pound made gains against the beleaguered USD yesterday; a day with almost no other data to look at. The Euro-USD rate was less bullish but is still above $1.22.
UK awaits positive data - Pound is up
The Sterling – Euro exchange rate is back up flirting with €1.14 as traders prepare for UK public sector borrowing data which is forecast to be quite positive. A substantial drop in borrowing is expected. We will also get the CBI industrial trends survey, which should remain in positive territory; albeit a tad down on the December reading. The GBPUSD rate could test the $1.40 level and the GBPEUR rate has the chance to break above €1.14 as well. Watch this space.
Euro could get a boost today
This morning will also bring the German ZEW survey results and the economic expectations index is forecast to be strong but a tad down on last month’s. Whether that, or something that comes out of the ECOFIN meeting of the EU finance ministers will be enough to boost the Euro is another matter. However, there is a feeling that this afternoon’s Eurozone Consumer Confidence survey will be very upbeat and that could be the catalyst that starts the Euro gaining ground.
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