A busy start to the week for China and commodities

This week began with a public holiday for the USA, when markets were closed for Martin Luther King Jr. Day. Money markets continued to move elsewhere around the globe, with developments for the commodity currencies, as China vowed to inject funds into its economy and counteract the slowdown. This helped oil and energy prices to rise and weakened the US Dollar a little, but was good news for the Australasian currencies, representing countries with close supplier ties to China.
 
The news, combined with talk that a China-USA meeting is nigh, also helped boost the Yuan. It may yet provide support for the Canadian Dollar, too, which faces potentially disappointing retail sales data this evening.
 
Elsewhere in Asia Pacific, the Japanese Yen fell as the Bank of Japan spoke about its plans for a continued cautious monetary policy and no change from the status quo. 

Sterling’s stiff upper lip

Meanwhile, Sterling has remained steadfast and surprisingly stronger than expected throughout the latest Brexit discussions and developments, not swaying even after Theresa May’s Plan B vote. Sterling remains stronger on hopes of a resolution, as the Opposition and UK parliament talked about offering support for a modified deal. There was some welcome good news for the UK on the economic data front, too: wages are up and unemployment is down, helping keep the Pound on an even keel – even enjoying a spot as the strongest performing currency this time last week.

For the most part, Sterling has continued to show a stiff upper lip in a tumultuous week for Brexit deliberations, rising in the run up to the first vote on the original deal, sinking a little on the narrow No Confidence result and continued fighting between UK politicians and trepidation at the swiftly put together Plan B. Then the Pound managed to recoup most of its losses as some semblance of progress appeared to be made. It’s hard to watch, but important to keep an eye on to see what happens next. We’ll keep you updated…

Not such happy news for the Euro

The Euro, on the other hand, has suffered this past week, as more data disappointments for the Eurozone and concerns about Brexit begin to bite. German production figures fell far more than expected and consumer confidence is also down in Germany; neither key indicator bodes well for the Eurozone’s economic strength. Talk of a Eurozone slowdown continues, and the European Central Bank is now in no position to raise interest rates, leaving the overall outlook for the Euro and European markets rather gloomy.