Dear Subscriber, Please find below today's update which gives you an insight into the current market conditions, enabling you to keep informed and up to date on the latest currency movements. Headlines
• German Manufacturing underwhelms - Draghi hints at more easing.
• US Manufacturing stutters - more growth needed to trigger taper.
• Canadian Retail Sales on tap - Chinese Manufacturing boosts Antipodean currencies.
Sterling In terms of UK economic data, yesterday was like a conversation on German politics between Wayne Rooney and Phil Mitchell: there was a distinct lack of anything noteworthy. At a conference in Brighton Labour's Shadow Chancellor Ed Balls took it upon himself to mock David Cameron over his "surprisingly small" Mickey Mouse towel, in reference to some humbling photos of the Prime Minister holidaying in Cornwall that surfaced last month, but that was about it.
Euro Sterling rallied by around half a cent against the Euro yesterday as a medley of European PMI data showed that Service Sector output accelerated in September, but that Manufacturing output slackened. The Composite Eurozone PMI result, which measures private sector performance right across the currency bloc, inched higher to a 2-year high of 52.1 thanks to strong Services data from Germany and France. However, Manufacturing activity in the 17-nation bloc underwhelmed analysts' expectations of 51.7, coming in at 51.1, due to a softer-than-anticipated German print of 51.3. The majority of traders saw the mixed bag of indicators to have a mildly negative influence on the single currency. The Euro's losses were compounded during the afternoon as European Central Bank President Mario Draghi once again hinted that he is considering embarking on further measures to loosen monetary policy. 'Super Mario' said that he was prepared to offer banks another helping of long-term low-interest loans to ensure that market interest rates don't rise to levels that could push inflation too low. The threat of further monetary easing has been hanging over the Euro for a few months now, and as ECB policymakers begin to strike increasingly dovish tones it is possible that GBP/EUR could continue to test new 8-month highs.
US Dollar The Pound appreciated by around a third of a cent against the US Dollar yesterday as Markit released a slightly-less-optimistic-than-expected report on the American Manufacturing Industry. The factory output indicator fell from 54.0 in August to a 3-month low of 52.8 in September as domestic and overseas New Orders weakened slightly. Additionally, the 'Greenback' was affected by comments from outspoken New York Fed President William Dudley, suggesting that amplified economic growth is needed to persuade the US Central Bank to start slowing the pace of its expansive $85 billion a month quantitative easing scheme.
Canadian Dollar Sterling struck a fresh 3.5-year high against the Canadian Dollar yesterday as support for the 'Loonie' resembled Ed Ball's veneration for David Cameron's Mickey Mouse towel. Later today Canadian Retail Sales are expected to rebound from June's terrible -0.6% decline to post a modest score of 0.5% for July, which could lend the 'Loonie' a helping hand, but it is unlikely to make the Prime Minister's towel any bigger!
Australian Dollar The Pound lost out on around half a cent to the Australian Dollar yesterday as investors saw renewed confidence in the Australian mining industry due to a 5-month high HSBC Chinese Manufacturing PMI reading of 51.1. The stronger-than-expected figure kindled hopes that Chinese Dragon's flame will continue to heat up Australia's most lucrative industry and this improved demand for the commodity-correlated 'Aussie'.
New Zealand Dollar The New Zealand Dollar improved modestly against the Pound yesterday, spurred on by impressive Manufacturing growth in the Island nation's biggest trading partner, China.
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