Daily Currency Insight from Halo Financial


(Clare Allen) #1

So did Russian Prime Minister Putin know he had done enough to secure the 2018 world cup which meant he didn’t need to go to Zurich to hear the result? The bare faced lies of the voting members of the FIFA committee have created a whole heap of conspiracy theories and suggestions of dastardly deeds. What! Corruption in football...who’d have thought it.



The disappointment of the British football fans was only matched by the disappointment of Brits needing to buy Euros who saw the value of their Pounds slip against the Euro. That was to be expected when the European Central Bank was widely rumoured to be buying the bonds of periphery EU countries in order to maintain confidence in these bonds and keep bond yields down. The fact that the rumours were proven to be true was enough to give the Euro another boost. This measure of quantitative easing also pushes further cash into the economy so the hope is that this money is shunted around the system, promoting economic activity. Whether that last bit actually happens hasn’t been proven in any of the countries which are involved in all manner of quantitative easing. We know this money gets as far as major financial institutions but the poor lending data from the UK, US and EU shows the banks are hoarding rather than lending all this extra liquidity. The International Monetary Fund and Head of the ECB are quick to warn everyone that the problems for the Eurozone are far from over.



In other news the Canadian Dollar has had a two day rally against the US Dollar and others as commodity prices and higher share prices have helped boost the value of the loonie - as the Canadian Dollar is known. Today’s Canadian employment report is expected to reflect a gain in jobs which would add to the strengthening pressure on the Canadian Dollar.



In other news the Canadian Dollar has had a two day rally against the US Dollar and others as commodity prices and higher share prices have helped boost the value of the loonie - as the Canadian Dollar is known. Today’s Canadian employment report is expected to reflect a gain in jobs which would add to the strengthening pressure on the Canadian Dollar.



The Australian Dollar, like the New Zealand Dollar and Canadian Dollar, benefitted from the increased optimism in the markets but poor retail sales didn’t help it advance in the way it perhaps should have done with the highest interest rate yields in this group of commodity exporters.



Today’s big news is the release of the November US employment report. It is expected that the figures will show stubbornly high levels of long term unemployed and that is both an economic and a political problem. The US Dollar, which weakened yesterday as the Euro advanced, could well lose a little more ground today. Those traders which can get to their desk in London will most likely sell the USD as we head into the weekend.



And finally, these WikiLeaks revelations are less about new information and more about confirmation of what we all probably already knew. The American’s described Gordon Brown as lurching from disaster to disaster and ran a ‘rudderless’ government; Yup. The Daily Morror made me laugh though when they were so surprised that the Duke of York was a trade envoy. HE has certainly inherited his lack of tact from his dad but doesn’t seem to have inherited the charm that is necessary to get away with being described as eccentric rather than just rude.



So have a great weekend everyone; i hope to be writing this report from my desk in Battersea on Monday rather than being in snowbound East Sussex but even though the snow is dire, it is very pretty. I hope you are safe and warm in this cold snap where temperatures are down to -20 in Scotland and -15 in northern England.



Written by David Johnson, Director at Halo Financial