USD weaker as US Government shut down looms [Video]

Today's Highlights

• Chinese banks banned from trading crypto-currencies

• New Zealand business sentiment eases

• UK Retail Sales awaited

Current Market Overview

US Government shut down looms

Every once in a while there is a threat of a US government shutdown and we are in the midst of one at the moment. And every time we near such a catastrophe, it is painted as much more likely than the last time. Hence the GBPUSD rate is threatening to test $1.40 and the EURUSD rate is pushing above $1.22. However, a stopgap spending bill has been passed and that'll tide things over until a deal is done.

UK retail sales data released today

Sterling is poised and ready for change ahead of this morning's release of the December UK retail sales data. Retailers themselves have reported figures that show a shift from big December to big November sales and this data ought to reflect that, but the annualised figure should be positive. Sterling is already on the up, so further upbeat news would give it a heft in the upward direction against the USD and Euro at least.

Chinese banks banned from trading crypto-currencies

Bitcoin and other crypto-currencies are falling after the Peoples Bank of China ordered Chinese banks to stop offering trading services for the mythical beasts. Bitcoin is 40% down on its recent high. They are interesting to watch, these crypto-currencies. A pure supply and demand item driven by hype and the usual fear and greed. I am sure there are theses being written around the world trying to understand them. Warren Buffet, who knows a thing or two about a thing or two, has studiously avoided them. That's worth mentioning.

New Zealand manufacturing activity slows

Back in the real world, New Zealand's manufacturing activity grew at the slowest pace in five years in December. The Reserve Bank of New Zealand (RBNZ) will not welcome that news, as they treat the fine line between stimulating the economy without strengthening the currency and overheating the housing market. Less of a tightrope and more of a slackline. Whether the December figure was a hangover from the messy election is an open debate, but the NZ Dollar has slipped above NZ$1.90 against the Pound at the Interbank level.

On the horizon for next week...

Other than the UK retail figures, this is a quiet day for data, so traders will be looking towards next week's figures. Those include an interest rate decision from the European Central Bank (ECB) and US and UK Gross Domestic Product (GDP) data. That is all likely to keep things lively.

The original Hollywood...

And finally, so popular is the famous Hollywood sign on the hill near Los Angeles that ideas are being sought as to how the traffic congestion in front of the sign can be eased. There is even a plan being mooted to create a second sign somewhere else to halve the problem. But surely people will know where the first one is, you know, the original, and nothing much will change. There is even a thought that an education centre could be built to teach people about the sign. It's a sign, for goodness sake! It's hardly Stonehenge or a pyramid, is it? Get over it...

Quote

I always say ‘Morning' rather than ‘Good Morning' because, if it was a good morning, I would be waking up on my 100 foot yacht in the Caribbean and my butler would already have the breakfast, bucks fizz and fresh towels ready. Anon