The Dollar, Euro, Sterling and Swiss Franc have all appreciated between 0.3% and 0.5% in the past 48 hours although the Dollar’s rally slowed to a near-halt today following mixed US macro data. While the manufacturing and non-manufacturing ISM indices both rose in November – suggesting that US GDP growth remains healthy – the private sector created “only” 179,000 jobs in November versus expectations of closer to 200,000. In the UK the frantic pace of Brexit-related news releases took a breather today with markets now squarely focused on Tuesday’s crucial parliamentary vote. Some ruling Conservative Party MPs are reportedly urging Prime Minister Theresa May to postpone Tuesday’s vote in order to avoid a likely defeat but she has so far shown little inclination to do so.
The Australian Dollar, however, was down 0.5% and has now weakened for four consecutive trading sessions. It is now down 2.5% since 2nd December to a one-month low. The Reserve Bank of Australia’s reluctance to even contemplate a rate hike had already put pressure on the currency on Tuesday and today’s GDP data release added to the pain. GDP growth halved in Q3 to 0.3% from 0.6% in Q2 and was a third of rate recorded in Q1 (0.9%). The Australian economy has been one of the fastest growing in the developed world but there are clear signs that it has struggled to keep up this pace of growth.
