John from Moneycorp

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About John from Moneycorp

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  1. Australian dollar is stronger today - following the release of the RBA's minutes which underlined positives in the economic outlook in Australia.
  2. The pound is weaker today. In Australia, there was the release of the Westpac Consumer sentiment, which rose from -1.8% to 0.4%. This has helped the Aussie dollar against the pound.
  3. Brexit press conference due at 5pm This week is set to be another Intriguing chapter with official Brexit negotiations starting today. In the absence of a U-turn the UK position of wanting free trade and border controls without being part of the customs union is unlikely to meet a welcoming committee and as such Sterling may remain range-bound for now. Sterling remains vulnerable to domestic political instability – with the weekend press focusing on the existential threat already to this government.
  4. Weekly currency update is below. The Aussie was the second best performer among the major currencies, behind the Canadian dollar. Against sterling it strengthened by one cent and it added half a US cent. It got two statistical legs up, the first coming when weak retail sales and slowing inflation in the States cast doubt on the upward course of US interest rates. The second was home-grown, in the form of unexpectedly strong jobs data that showed employment increasing by 42k in May. Sterling was fortunate not to extend the losses it suffered in the immediate aftermath of the general election. UK industrial and manufacturing were disappointing, as were retail sales. Inflation accelerated to 2.9% (CPI) and 3.7% (RPI), outpacing the 2.1% increase in wages and putting a further squeeze on household spending power. The pound was saved by the three members of the Monetary Policy Committee who unexpectedly voted for higher interest rates. No actual increase is imminent but there won't be any further cuts.
  5. Not much news coming out of Australia – bit more surrounding the UK. UK inflation Consumer and retail price index data put UK inflation higher than the Bank of England's 2%target and they were ahead of analysts' projections. CPI was up by 2.9% on the year and RPI rose by 3.7%. The data helped the pound towards its first winning day since Thursday. Sterling was already on its way up when the inflation figures came out and they might have given it a little more impetus. However, investors are under no illusion that the Bank of England will take any policy action, given the uncertainty that lies ahead for the UK economy. As shown by the price action on Friday and Monday, the pound is deep inside don't-know territory. On Monday and Tuesday there was no shortage of economic pundits telling the financial media that the pound has been oversold; driven below levels that can be justified by economic fundamentals. That is not to suppose that it must therefore rebound in the immediate future: Trends like this have a tendency to overshoot. Spending power Whether CPI or RPI represents the best barometer of consumer prices, both indices were higher than the last measure of average earnings, which went up by 2.4% in the year to April. That means household spending power is declining. Today's wages figure will be examined closely for signs of further erosion. The UK employment data this morning are forecast to show an extra 10k jobseekers with the rate of unemployment steady at 4.6%. Average earnings growth is also supposed to be steady, at 2.4%. A lower number would be unhelpful to sterling
  6. There were two overnight lurches for the Australian dollar. The first was downwards, after the current account deficit for the first quarter came in at $3.1bn instead of flat. The second one, upwards, was the result of the Reserve Bank of Australia's decision to leave its Cash Rate unchanged at 1.5%. They cancelled each other out.
  7. A look back at the end of last week. Sterling lost an average of -0.4%, partly because of disappointing data for first quarter growth, partly because of opinion polls ahead of next week's general election and partly just because it is out of favour among investors. Its biggest loss was of -1.1% to the Japanese yen. Thursday's revised figures for gross domestic product in Q1 put quarterly growth at 0.2% rather the 0.3% expansion previously announced. The change came as a surprise and therefore as a disappointment, especially as the downgrade related mainly to consumer spending. Another concern to investors was the narrowing advantage, reported by opinion pollsters, of the Conservatives over the Labour party. It has fallen from 22 points to 5 in just two weeks. Other figures already released show Australian building permits increasing by a monthly 4.4%. Overall, the pound is weaker against the Australian dollar.
  8. Not great news for the pound. UK economy slowed down more than expected in first quarter - part of the reason has been higher inflation impacting consumer spending.
  9. Poor retail sales figures in Australia have weakened the Australian dollar.
  10. Pound still strong so far this weekend against the Aussie dollar.
  11. Will depend on economic and political events, lot of things going on which may impact the exchange rate.
  12. Hi everyone This thread will provide updates on the pound and Australian dollar. A round up of the latest news from the past weak is below. In an unusually quiet week the biggest half-dozen currencies moved by less than 1% against one another. Sterling covered a range of one and a half cents against the Aussie, strengthening by three quarters of a cent. The Australian economic data were a mixed bag, with rising new home sales, private sector lending steady and AiG's performance of manufacturing index for October slipping further into the contraction zone at 43.6. It has been below the 50.0 boom/bust dividing line since April. Thanks John