Daily currency update courtesy of Halo financial

(Catharine Higginson) #1
So this last week has proven that if you want to commit a crime in Britain, it’s best to do someone physical harm rather than steal anything valuable. This case is made M’lud by two stories. Two cowardly thugs beat an elderly man to the ground and killed him. They filmed their attack for a ‘bit of fun’; they called it ‘happy slapping’. He died in the street in front of his three year old granddaughter. They will be out of jail after serving roughly 18 months. In contrast a thief who stole a book of Shakespeare’s work and tried to sell it on has been locked up for 8 years. Mr Cameron, if you want to restore the public’s faith in justice, I offer these two cases as a perfect example of what is wrong with your sentencing guidelines.

On a brighter note, Sterling had rather a good day yesterday after positive results from HSBC bank and a feeling that other high street banks will also post good results in the week ahead. It is a bitter pill to many that the banks which were at the heart of the global economic collapse are still making profits but Whatever the moral questions; the fact that they are in solid form means pensions and investments are likely to increase in value. So the Pound has managed to push slightly above the levels we expected to cap the market and it looks like it has stayed there overnight as well. There are a lot of people with fingers tightly crossed hoping for a more sustained rebound in the Pound (poetry as well eh!). The Pound was also helped by a positive report from the Chartered Institute for Purchase and Supply (CIPS) which showed manufacturing expanded for the 10th consecutive month. Traders may not be so encouraged by today’s construction and housing data so profit taking is likely to erode some of the gains of the last few days.

Sterling was up against the US Dollar which slipped as investors continued their flow into higher yielding assets and away from the US Treasury market. Shares are up around the world; the Dow Jones index hit its highest level in 10 weeks yesterday and the FTSE 100 recovered all of its June losses and more; other share markets have seen similar growth. This is a clear sign that investors are venturing out from their safe havens and evidence that, with a little encouragement, we could see further weakness in the US Dollar. There is a raft of US data due for release today and much of it has the potential to move the market. Personal income and expenditure data, pending home sales and consumer confidence figures are all due for release during the London Afternoon session so we can expect significant US Dollar volatility around that time.

Overnight news that Australian interest rates were left on hold will have calmed the Australian Dollar a tad but it is still weaker against the Pound this morning. It has also slipped a tad against the US Dollar as the threat of higher interest rates in the future was dampened by the Governor of the RBA. The bond markets are pricing in less than 25 basis points of interest rate rise over the next year, so the field is open for further weakness in the Aussie Dollar, especially if investors feel they can get a better return in share markets than the interest rate yield advantage that Australia’s base rate offers.

The Euro is largely in middle ground; it has gained against the embattled US Dollar but is still weaker against the Pound and others. This week’s European Central Bank interest rate decision is expected to be an ‘on hold’ announcement and we don’t expect much change in the statement that accompanies the decision either although Monsieur Trichet has proven that he has the capacity to surprise. Against the Pound, the crucial levels are €1.2150 and €.1850. A test on either side of this range would tell us we are into a new pattern of trade but as long as we remain in this narrow channel, then we just have to use the volatility to buy or sell at the extremes of the range.

Other currencies are also hitting the outer limits of their ranges. The Japanese Yen is worryingly strong as far as the Bank of Japan is concerned but as investors venture out into other assets, that is likely to change and the Swiss Franc is still too strong as far as the Swiss National Bank are concerned and oddly, even though the demand for safe havens appears to be waning.

And in other news, robbers are having a hard time of it lately, there was a story of a masked, machete wielding raider who was tackled by the cashier at an Adult bookstore at Niagara Falls and fled empty handed, the Wendy’s burger bar raider who felt short changes because there was so little in the till and now we hear that Ms Nayara Goncalves, who works in a mobile phone shop in Florida, talked a would be robber out of doing bad because it was wrong in the eyes of Jesus. What a sermon she must have preached because the robber eventually apologised, told her the gun was a fake and left the store empty handed. Please tell Clegg and Cameron we have found the head of their crime prevention team.